15/10 2018 // International
Deal or no deal: the Brexit showdown is getting closer
The United Kingdom is leaving the EU at the end of March 2019, that much is fixed. The only question is how tough the consequences will be of a post-EU era. The crucial phase of the exit negotiations has begun.
Peter Wittig, German Ambassador in London, did not put it diplomatically: "We will experience a drama in the coming months", said Wittig at a panel discussion on Brexit at the Business Day of the 16th Ambassadors Conference in the Foreign Office in Berlin. The bond between the EU and the United Kingdom will be finally and irreversibly cut on 29 March 2019 – regardless of whether or not there is a final exit agreement by then. "Brexit will be the end of the status quo", said Sabine Weyand, Deputy EU Chief Negotiator for Brexit.
The crucial phase of the negotiations has now begun. The next EU summit will take place on 18 October, where both sides hope to reach an agreement on withdrawal by the end of March 2019. Although there is another EU summit on 13 December, it could already be too late. By mid November, a withdrawal agreement is required if we want a "soft" Brexit, said Weyand. "80 percent has already been negotiated, but 20 percent is still missing", the deputy chief negotiator added. But this includes the sensitive issue of Northern Ireland, without whose clarification there will be no agreement from the EU.
Save in the transitional period
Those responsible have already said goodbye to the idea that by the end of March 2019 all outstanding issues of later cooperation between the United Kingdom and the EU could be clarified. Rather, it is now about to save themselves with the withdrawal agreement in the transitional period until the end of 2020, when it is hoped to clarify all the difficult issues. "Trade in goods, and customs and logistics are still unclear. We need to gain time", said Joachim Lang, chief executive of the BDI. The aim is to keep the damage as low as possible for German companies.
There will be damage for the economy, especially financial damage. "Companies have higher logistics costs, and free cash flow is lost", said BME Federal Executive Chairman Horst Wiedmann, who called Brexit a "money-making machine". Above all, he worries about the medium-sized suppliers, who do not have the time and personnel to prepare for Brexit, in the same way that corporations and large companies do.
Precisely this kind of preparation was demanded by Axel Dittmann, a representative for basic questions related to the EU and Brexit in the Foreign Office: "The negotiations can succeed, but they do not have to. We have to be prepared for all scenarios."
UK "is negotiating with itself"
How much drama there will be in the end and whether it will actually come to a real "show down" depends on the Brits. Such was the opinion of the panellists . "The country is divided, it negotiates above all with itself", clarified Ambassador Wittig, discussing the tensions on the island. He holds a "deal" for the orderly exit of the British from the EU the more likely variant, although a "no deal" was not off the table. "The United Kingdom must be prepared to bear the consequences of its Brexit decision. I do not think that this willingness is very pronounced yet", emphasised Sabine Weyand.
If the negotiations fail in the upcoming weeks, it should not be blamed on the EU. The EU is at any time interested in the conclusion of a withdrawal agreement. "A no deal can never be a consequence of EU action. However, the EU must and will continue to adhere to the integrity of the internal market and not give up this 'brand core'", said Weyand.
In addition to integrity, communication is also required
The importance of the integrity of the internal market of the Member States, soon to be reduced to 27, was emphasised by Axel Dittmann. At the same time, there would also be a desire for close partnership with the United Kingdom. "It would be desirable for the United Kingdom to remain in the customs union and the internal market", said Joachim Lang.
Horst Wiedmann is mainly worried about potential imitators of Brexit in other states. He advocates not only integrity but more and better communication in terms of the benefits of the EU. "We need positive examples of what the EU is about. Every citizen has to be able to answer this question for themselves. "This is the only way to prevent copycat effects in other countries.”
Tobias Anslinger, BME