Brexit: May soothes the Franco-German motor

22/07/2016

The symbolism has not escaped the attention of the German media, which has been quick to note that, unlike her predecessors, Mrs May has chosen not the United States to visit first, but Germany.

What we can draw from the separate meetings is extremely limited. Both continental politicians are facing re-election next year and will be more concerned with their domestic audiences than UK sentiment. And at least one of them will probably not survive the electoral process.

However, Merkel seems to have offered Mrs May some breathing space, agreeing that the new Prime Minister should not trigger Article 50 until the New Year. Merkel is happy to give the new government time and will then respond in a "constructive" manner in "a spirit of solidarity". She told reporters that Britain needed a "well-defined position" before starting the talks.

Whether this spirit of goodwill is entirely shared by President Hollande remains to be seen. Before meeting Mrs May yesterday evening, he was in the Republic of Ireland talking to Taoiseach Enda Kenny, with Brexit and terrorism on the agenda.

Both men expressed concerns about any undue delay in the UK starting Brexit negotiations, with Hollande declaring that they should not drag on. "The sooner the negotiations are opened the better, and the shorter the better", he said.

In the evening, after yesterday's meeting with Mrs May, however, he was more specific, agreeing that there needed to be "preparations" for the negotiations. The led the Financial Times to speculate that he was relaxing his stance.

Nonetheless, Hollande repeated that it was in "the common interest" that the talks should be "sooner the better", warning that there could be "no discussions, no pre-negotiation before the negotiation". On the plus side, the French President agreed that the Le Touquet agreement on border controls would stay in place.

Less helpfully, Hollande warned that if the UK chooses to limit free movement of persons, it will see trade restrictions introduced. At a press conference after the meeting, he talked of this being "the most crucial point". "Britain will have to choose: stay in the single market and accept free movement or have another status", he said.

This was earlier reinforced by Pascal Lamy, former WTO head, who said that it was "pie in the sky" to expect free trade with Europe while curbing EU migration.

Interestingly, and perhaps significantly, the day previously, Merkel had refused to be drawn on the issue, saying it would "cause too much uncertainty" if leaders commented on possible negotiating scenarios. Nevertheless, according to Frankfurer Allgemeine Zietung, Mrs May stated that freedom of movement: "will be part of our discussions".

May said her priority was a "sensible and orderly departure", even though that would "not please everyone", although she is not offering any clues as to her vision for a post-exit settlement. Before leaving for Berlin, though, she was confronted at PMQs by Sir Edward Leigh, who asked is she was "prepared to reject staying in the single regulated market and to offer instead to our friends in Europe a free trade deal".

All he got for his efforts was a non-committal Mrs May, telling him that "we need to ensure that we listen to what people have said about the need for controls on free movement, and that we also negotiate the right and best deal for trade in goods and services for the British people".

Leigh's intervention was indicative of a rich vein of sentiment amongst backbench Tory "eurosceptics", whose tenuous grip on reality keeps them firmly anchored in 80's free-trade doctrine, where "deregulation" is almost a religion and ending free movement has become an article of faith.

The extreme end of this sentiment can be seen in this month's Eurofacts which has an insane piece from Michael Shrimpton on its front page. It has him writing that "a failure to denounce the EEA Agreement would be a gross betrayal of the electorate, and constitutionally improper".

That we are getting this sort of thing from Shrimpton is no surprise, but the fact that it gets front-page treatment on Eurofacts reminds us of a (hopefully) dwindling corps on the leaver "community" who are to Brexit what flat-earthers are to geography. Short of pulling the plug on the ECA tomorrow, there will be no pleasing this sect.

For different reasons, we can no more trust what Hollande has to say. Booed in the aftermath of the Nice atrocity, and with Marine Le Pen breathing down his neck, his statements are conditioned by his domestic audience and his need to hold on to the reins of power. Looking too friendly with a British leader is not good for his ratings.

Neither can anything be taken from the diplomatic pleasantries between Merkel and May. The German press is quick to remind us that Dr Merkel has a habit of being nice to visiting politicians, only later going on to eviscerate them. But then, she doesn't eviscerate everybody she meets.

Pleasantries of the kind reported are common, the Germans tell us. But one can assume that both were serious. May wants to take the UK out of the EU without triggering a recession or consigning us to political isolation. Merkel wants to prevent Brexit plunging the euro zone into a new crisis or splitting the European political community asunder.

To that extent, Merkel and May share the same interests and, if Merkel survives next year's election, there should be a meeting of minds. But, with Hollande almost certainly for the chop, there will be a whole new set of political relationships to forge before we can get down to the nitty-gritty of the Article 50 negotiations.

At some time, however, it may dawn on the UK government that the key bodies in the early phase are the EEA institutions, the Council and the Joint Committee, releasing us in the early phases from the tyranny of the Article 50 timetable. But, for us to benefit from this release, serious policy decisions are going to have to be made by Mrs May.

As it stands, there is little point in looking to David Davis for inspiration. "Mr Brexit" did not accompany Mrs May to either of the capitals, and the egregious Mr Johnson was also noticeable by his absence. This could suggest that Mrs May intends to take a hands-on approach to the negotiations, leaving her ministers the minor role of attending to the administrative details.

The Irish Times has a different "take" on this, suggesting that the "three Brexiteers" are to become the "fall guys", when Brexit doesn't deliver the eurosceptic fantasies.

While May will make Brexit happen, writes Noel Whelan, she and her government will inevitably be accused of a selling-out on some aspects of it. She has decided that Boris and the other Brexiteers should be beside her in the tent taking the flack for those compromises and having to explain the extent to which they may have oversold the benefits of leaving.

As for the present, May's direct intervention already seems to be yielding dividends. Confronted with the problem of the two-year initial limit on the Article 50 talks, German officials are conceding that the timescale is far too short.

To deal with this, officials are spelling out two possible scenarios. Under the first, the EU would revise its position and agree to a prolonged period of negotiations before Article 50 is invoked. That would win both sides extra time before the clock starts ticking.

Under the second option, May would trigger Article 50 early next year but would be for Britain to settle for a very basic framework for its future ties with the EU, based on an existing model. Enter the first phase of Flexcit ... they get there eventually.

As regards extending the time before the talks start, this was precisely the option I put to the Treasury Committee, something I first suggested at the end of June.

My suggestion had MP Stephen Hammond, and Treasury Committee member, airily summoning up "the world of realpolitik", arguing that this would be "unlikely", thus reinforcing the view that Mrs May is going to have to look outside Westminster for her advice.

But, in first attending to the Franco-German motor, Mrs May has at least got her priorities right.