Brexit: an opening position

07/10/2016

This was at the BDI annual congress in Berlin – the German equivalent of the CBI – where the Chancellor expressed her concern that allowing the UK unrestricted access to the Single Market without also requiring freedom of movement could undermine the fundament principles of the European Union.

But the FT is only conveying the general thrust of Merkel's words – and the spin is entirely speculative. To all intents and purposes, this is just a repetition of her previous position, with nothing very much added.

In fact, what is remarkable about the Federal Press Release is how little emphasis was given to this issue in a speech that gave far more time to the effects of globalisation and TTIP and the refugee situation. This is also a German Chancellor coming under heavy criticism from industry for being "too timid" and not acting to address high unemployment.

And what is completely missing from the FT report in this pre-election year is the speech of Merkel's political opponent, SPD leader Vice Chancellor Sigmar Gabriel.

Addressing the same audience, he called for a solution that would satisfy even the British. The "anger" over the referendum, he said, should not go so far that "we do not do anything to keep the Brits close to Europe". We should, he said, make an offer that would allow the British to "remain close to us". Perhaps, he added, "there is a chance that they will return one day".

Looking more closely at what Merkel said, we have her setting out her position in somewhere diffident terms. She actually states: "If we do not say full access to the single market is linked to full acceptance of the four freedoms, then we have a Europe where everyone does what they want". "There are no easy negotiations", she added, then saying that that negotiations would need to make clear what access each side has to the other side's market.

In other words, that is indeed where Angela Merkel was at. She was stating her negotiating position. And that is precisely how Chancellor of the Exchequer Philip Hammond sees it. "The opening position of the European Union will be that it's either or", he says. "It will be an extreme statement of the position that the four freedoms are indivisible and there can be no access to any of the markets unless there is an adherence to all of the four freedoms".

"There will be a discussion and a solution which, as the prime minister said, will involve give and take on both sides", he adds, "because you can't have a negotiation otherwise".  In a realistic appraisal of the state of the art, Hammond went on to say: "We don't delude ourselves that our European partners owe us any favours. The deal that emerges from this process will be a deal that delivers advantage to both sides".

Prior to the negotiations, though, Mrs Merkel is holding the line because, as the leader of the largest country in the Union, she must. But the UK is not the only country worried about the unrestrained movement of people throughout Europe. And, while no one will accept re-erecting the borders, no-one is actually talking about that – not even Mrs May, who didn't once use the "borders" word during either of her Conference speeches.

However, this does not stop The Times turning Merkel's ritual denunciation into a Europe-wide condemnation, as it marshals minor political figures from France and Italy to add to the noise. In common with the FT and others, wants to promote the confrontation narrative, with a "hard Brexit" the outcome.

Whatever the media makes out, though, free movement of people is negotiable. It always as been negotiable and it will be on the table during the Brexit talks. Eventually, the media narrative will catch up.