A Dangerous Game

LONDON/BERLIN (Own report) - Berlin and Brussels are intensifying their pressure on London prior to next Wednesday's official Brexit notification. "Britain's example" will make all others see "it's not worth leaving," European Commission President Jean-Claude Juncker declared. According to Brussels, the Brexit could cost the United Kingdom up to 60 billion euros. London sharply objects to this impertinence, pointing out that, the EU and particularly Germany, are dependent, for economic and military considerations, on consensual exit regulations. German industry would in fact be hit hard by a hostile British exit. Britain is Germany's export-oriented economy's third largest customer and second largest location for German direct investments. For quite some time, Berlin also has set its hopes on Great Britain's contribution to the EU's militarization - even after Brexit - because of the military clout of its armed forces and its nuclear arms.

On a Collision Course

Berlin and Brussels are intensifying their pressure on London prior to the Brexit notification announced for next Wednesday by Prime Minister Theresa May. "They will all see from Britain’s example that it's not worth leaving the EU," European Commission President Jean-Claude Juncker declared.[1] EU circles are systematically spreading the rumor that Brexit could cost London 60 billion euros - five and a half times the United Kingdom's most recent net contribution to the EU's budget.[2] Other statements suggest that the EU could exert massive pressure on the United Kingdom in the context of negotiations. London is preparing itself, has already announced a "hard Brexit," and is indicating that it will not be blackmailed. Even if Britain were to leave the EU without a deal it would be "perfectly OK," the British Foreign Secretary Boris Johnson said. However, he does not expect this to happen: "Our partners and friends around the EU desperately want this thing to work."[3]

Profitable Business

The German economy would be particularly affected by a hostile separation from the United Kingdom. German companies have invested nearly 120 billion euros on the British Isles - over ten percent of all German foreign investments. Over the past few years, Great Britain also has developed into Germany's third most important customer. Between 2010 and 2015, German exports to Britain had increased by nearly 50 percent - to almost 90 billion euros. The demand for British goods being much lower in Germany, the German trade surplus with Britain reached nearly 51 billion euros in 2015, totaling more than 196 billion euros from 2010 to 2015. Last year, more than 50 billion euros were again added to the trade surplus. In the period of the Euro crisis and sanctions against Russia, Great Britain had made a significant contribution to help finance Germany's export industry. This could now change. Since the June 23, 2016 Brexit referendum, German exports to the United Kingdom have slumped, due also to the currency exchange devaluation of the British pound - for the first time in years. "In the fourth quarter alone, the exports decreased by nine percent," Eric Schweitzer, President of the Association of German Chambers of Industry and Commerce (DIHK) complained at the end of last week.[4]

More Intensive Military Cooperation

Breaking ties with the United Kingdom would not just have serious consequences on the economy, but on military policy as well. A few years ago, the German government had begun to lay the broad foundations for cooperation between the Bundeswehr and the British armed forces. This was obviously due to the fact that London was not willing to integrate British troops into an EU army; therefore the only remaining alternative permitting the benefit of Great Britain's military clout, would be bi-lateral cooperation. Agreements to this effect were initiated August 12, 2014, during British Defense Minister Michael Fallon's first official Berlin visit. These agreements were adopted into Britain's long-term military strategy, entitled the "Strategic Defense and Security Review" (SDSR), adopted in London in November 2015. Germany, for the first time, was promoted to a central military ally, alongside the USA and France. "We will work to intensify our security and defence relationship with Germany."[5] The document lists the first areas for closer bilateral cooperation. The Defense Attaché at the British Embassy in Berlin, Brigadier General Robert J. Rider, has meanwhile submitted concrete proposals for discussion in a working paper at the Federal College for Security Studies (BAKS).[6]

Not Unconditionally

Planning for the German-British bilateral military cooperation has not been affected by the Brexit referendum. In October 2016, during an event at the German Embassy in London, Michael Fallon confirmed that the British "commitment to European security" remains steadfast even after Britain's exit from the EU, he therefore wants to turn up the volume on their partnership.[7] In February 2017, his German counterpart, Ursula von der Leyen reiterated that also in the future a "tight cooperation on military matters" should be ensured, which is why she is forging a security "road map" with Fallon.[8] Fallon added that although the preferred cooperation framework is within NATO, the U.K. may still take part in EU military operations after leaving the bloc. This is very desirable to Berlin, because the United Kingdom not only has the strongest European military, but also disposes of nuclear weapons. Experts, however, agree that the option of being able to rely on British help in EU military interventions will, at least to some extent, depend on a reasonably consensual settlement of the Brexit process. "The simpler the negotiations, probably the better the security policy relations," according to a former British diplomat.[9] For her part, Prime Minister Theresa May, made it clear that if exit negotiations turn sour then current joint work on security, intelligence and military collaboration could stop.[10]

"A Second Geopolitical Pole"

Along with the serious economic and military setbacks that could develop from a hostile separation from the United Kingdom, acute geostrategic disadvantages could also result. "From now on, the EU's clamp, holding London to the continent, will be missing," according to a leading German daily's main editorial in January.[11] "For Germany, which has become accustomed to speaking in the name of Europe," this is "not good news." "The British taking their independence from the EU, has led to the creation of a second geopolitical pole that will be pursuing objectives not automatically in sync with those of Brussels', Berlin's, or Paris'." Without a consensual Brexit regulation, the German establishment's dream of being able to call not only upon the resources of the continent, but also those of the British Isles for its expansive global policy would be over.

For more information on this subject see: Secession as a Point of Leverage (II).

[1] EU will schnell zur Sache kommen. www.handelsblatt.com 20.03.2017.
[2] Thomas Gutschker: Eine saftige Rechnung für London. www.faz.net 20.03.2017.
[3] "Kein Abkommen mit der EU wäre vollkommen okay". www.spiegel.de 12.03.2017.
[4] DIHK-Präsident: Brexit wird "gravierende" Folgen haben. www.zeit.de 18.03.2017.
[5], [6] Robert J. Rider: Where is the Beef? Chancen einer engeren deutsch-britischen Sicherheitspartnerschaft. Bundesakademie für Sicherheitspolitik: Arbeitspapier Sicherheitspolitik Nr. 8/2016.
[7] UK and Germany step up Defence cooperation on day of unity. www.gov.uk 07.10.2016.
[8] Patrick Donahue, Matthew Miller: Germany Forging Post-Brexit Defense 'Road Map' With the U.K. www.bloomberg.com 19.02.2017.
[9] James de Waal: Der Brexit und die britische Verteidigungspolitik. Bundesakademie für Sicherheitspolitik: Arbeitspapier Sicherheitspolitik Nr. 28/2016.
[10] Patrick Donahue, Matthew Miller: Germany Forging Post-Brexit Defense 'Road Map' With the U.K. www.bloomberg.com 19.02.2017.
[11] Nikolas Busse: In einer neuen Welt. Frankfurter Allgemeine Zeitung 27.01.2017. See In the Name of Europe.