Global Britain and the EU (II)

EU increases pressure on Great Britain in spite of post-Brexit trade deal. German government advisors see common foreign and military policy in jeopardy.

BERLIN/LONDON | | grossbritannien

BERLIN/LONDON (Own report) - Fierce attacks by politicians and media in Germany against Great Britain are flanking the ratification of the EU-UK Trade and Cooperation Agreement. EU Commission President Ursula von der Leyen threatens punitive measures, if London fails to scrupulously comply with the agreement. Punitive tariffs are being discussed in Brussels. Germany's main media outlets are fueling the old prejudice against Great Britain of the "perfidious Albion." German government advisors warn that the severely "strained" relations "limit" the urgently desired EU-UK foreign and military policy cooperation. "Trust" could be built through exchanges in "bilateral and minilateral formats," for instance in the "E3" framework (Germany, France, Great Britain) to lay "the foundation for long-term institutionalized cooperation." At the same time tensions are growing in the dispute over cooperation in the financial sector, threatening to deepen the rift between the two sides.

Extension of the Grace Period

On Tuesday, following a significant delay, the EU Parliament finally agreed on the Trade and Cooperation Agreement with the Great Britain, creating the framework for EU-UK post-Brexit economic relations. Of the 697 MEPs 660 voted in favor of the deal, which will go into effect on Mai 1. The ratification was initially set for the end of February, at the latest. Since the EU Parliament did not see itself in a position to meet the deadline - claiming it was not possible to have had the agreement translated into all official EU languages and to have completed a meticulous legal examination by then - Brussels had to ask for a grace period until the end of April. London readily agreed. The EU, on the other hand, simply rejected the UK's request to also extend the grace period for the implementation of some of the rules pertaining to Northern Ireland, which the British government views as indispensable to avoid serious food supply problems in that part of the country. Rebuffed by Brussels, London unilaterally extended the grace period, to secure the supplies for the population and prevent major unrest in Northern Ireland.

"Perfidious Albion"

The EU used this as a pretext for taking political and legal action against Great Britain. Already in mid-March, Brussels launched infringement proceedings against London for breaching the terms of the Brexit deal. Infringement proceedings are not uncommon. By mid-2020 for example, 81 such proceedings were pending against Germany alone, (german-foreign-policy.com reported,[1]) without having led to major consequences for Germany. Now however, the EU is increasing pressure on the United Kingdom. Commission President Ursula von der Leyen threatened to use other "tools if necessary." On Tuesday, the possible application of punitive tariffs against London were discussed.[2] In addition to these escalating threats, German politicians and media outlets have been fueling hostility toward Great Britain. Nicola Beer (FDP), Vice President of the EU Parliament, accused the British government of "arrogance," while MEP Bernd Lange (SPD) claimed, without further elaboration; London could impose "dubious financial services" on the EU. "The Europeans," writes for example the German daily Handelsblatt, have to deal with a "perfidious neighbor."[3]

Difficult Cooperation

While politicians and the media are stirring up hostility, in Berlin, government advisors are warning that the "strained EU-UK relationship" are setting "limits" to cooperation in questions of foreign and military policy.[4] As a recent analysis published by the German Institute for International and Security Affairs (SWP) notes, the Union had already offered the United Kingdom cooperation in foreign and security policy, during the negotiations on their future relations. However, London was only offered participation as supporter of EU decisions without having a voice, which is hardly acceptable to the UK. The most recent tensions have further degraded prospects, especially since the UK clearly prefers flexible formats with individual EU states - particularly France and Germany - rather than institutionalized cooperation with the EU as a whole. This is damaging from the perspective of German strategists. Germany wants to involve London in European foreign and security policy, as closely as possible, to benefit from its diplomatic and particularly from its military clout for its own objectives. (german-foreign-policy.com reported.[5])

"Poison in the System"

To work toward this objective, the SWP makes a plea to initially cooperate with Great Britain "in bilateral and minilateral formats" in questions of foreign and military policy, particularly within the "E3" framework - a loose-knit coalition consisting of Germany, France and the United Kingdom, which the participants see as having been successful in the negotiations with Iran on the nuclear deal.[6] Successful cooperation in a smaller formats could create "reliable working relationships, (re-)build trust, and produce positive results, thus establishing the foundation for long-term institutionalized cooperation." A "normalization and institutionalization" of EU-UK relations, of course, would require not merely a change in London’s political position, but also "a greater openness on the part of the EU" notes SWP. However, with the Unions infringement proceedings and its recent threats of punitive tariffs against Great Britain, the EU is still far from making that step. Yesterday, a commentary noted that "the EU's threats" are "not the music that one would choose for a revival." It is "poison in the system."[7]

The City of London's Future

Disputes continue over the sector that was excluded from the post-Brexit Trade and Cooperation Agreement: the financial sector. The EU and UK concluded a Memorandum of Understanding at the end of March, which defines the basis for future cooperation on financial services. However, the key "equivalence decisions" have yet to be made. With these, the EU will declare that the British financial market regulations are equivalent with its own - and thereby, create the conditions for British financial service providers to have access to the Union's markets. In most subsectors, Brussels has been refusing this "equivalence," to apply pressure, in the hopes of forcing London to subordinate itself to EU finance regulations. However, resistance is now growing in the City, with increasing efforts aimed at no longer relying on obtaining equivalence with a stagnating EU, but, rather focusing on sectors of the future, such as the Fintech branch [8] and gaining greater access to markets outside the EU,[9] some of which are growing faster. If successful, the rift between the British Isles and the European continent will soon grow even deeper.

 

For more information on this theme see Global Britain and the EU.

 

[1] See also Deutsche Sonderwege.

[2], [3] Christoph Herwartz: Handelsvertrag der EU mit Großbritannien kommt: Kein harter Brexit, aber großer Ärger. handelsblatt.com 27.04.2021.

[4] Claudia Major, Nicolai von Ondarza: Die EU und Global Britain: So nah, so fern. SWP-Aktuell Nr. 35. April 2021.

[5] See also Das europäische Militärdreieck and The Future of Warfare.

[6] Claudia Major, Nicolai von Ondarza: Die EU und Global Britain: So nah, so fern. SWP-Aktuell Nr. 35. April 2021.

[7] Klaus-Dieter Frankenberger: Trauer und Drohungen. Frankfurter Allgemeine Zeitung 28.04.2021.

[8] Philip Plickert: Die City sucht den Fintech-Ausweg. faz.net 11.04.2021.

[9] Simon Foy: EU 'needs London' and will sign post-Brexit City Deal, PwC predicts. telegraph.co.uk 25.04.2021.