Mujtaba Rahman is the head of Eurasia Group’s Europe practice and the author of POLITICO‘s Beyond the Bubble column.
This week’s crunch European Council summit on Brexit isn’t a showdown between the U.K. and the EU. Whether or not there’s significant progress toward a deal depends on who wins a less visible — and often forgotten — tug-of-war between Paris and Berlin.
The two capitals have subtle, but real, differences over the shape of the U.K.’s future partnership. If there is to be a Brexit trade deal, the submerged rocks of those differences will have to be navigated.
Since the start of negotiations, the EU has been broadly united behind Michel Barnier, its lead negotiator. Far from sowing the divisions that Euroskeptics lazily predicted, Brexit has proven to be a useful team-building exercise. In this, it was aided and abetted by successive Tory governments — including former Prime Minister Theresa May’s have-your-cake-and-eat-it attempt to be simultaneously in and out of the single market and Boris Johnson’s overtly Euro-hostile rhetoric.
This has meant the EU has never felt under pressure. There has been little incentive to compromise.
Berlin has been the one to constantly fret about the strategic and geopolitical consequences of the U.K.’s departure.
Now, with signs of potential U.K. movement on one of the EU’s core interests — state aid, or Britain’s post-Brexit subsidy regime — difficulties will arise between EU capitals. Just how much can they concede? At what point does a deal become preferable to no deal?
How the EU chooses to answer these questions will depend on the dynamic between Paris and Berlin.
The chancellery and the Elysée have had different approaches to Brexit since the start. Perhaps surprisingly, Berlin has been the one to constantly fret about the strategic and geopolitical consequences of the U.K.’s departure, which it sees as a big loss for Germany and the EU.
This has led Chancellor Angela Merkel to lean on the side of a polite, civilized and constructive process with London throughout the divorce and trade negotiations. As one senior German official who knows Merkel well told me, her thinking on Brexit can be summed up as: “Better if in, but if not, then close.”
French President Emmanuel Macron’s stance on Brexit has been more defensive, and more influenced by his domestic politics. Facing competitive elections to the European Parliament in 2019, Macron was of the view that the three credible outcomes from divorce negotiations — an inferior deal, no deal, or a referendum and reversal — would all help him in his contest against Marine Le Pen. Each would nicely demonstrate the cost, or difficulty, of leaving the EU.
This thinking is reinforced by the Elysée’s belief that Brexit is also an opportunity for France and the EU. In an EU of 27, France is positioned to become the foreign and security hegemon to counterbalance Germany’s economic dominance. It is no coincidence that the Macron’s vision of the EU — a “geopolitical” union unafraid to call out the “brain death” of NATO and seek “strategic autonomy” from the rest of the world — prioritizes those areas where Paris has a comparative advantage over Berlin.
The Elysée also believes the U.K. is negotiating from a position of weakness. Against conventional wisdom, senior French officials point out that France has less at stake in avoiding a no-deal scenario than, say, Ireland, Germany or the Netherlands, which are all much bigger players in EU-U.K. trade.
These differences explain why France remains one of the hard-line EU member countries on Brexit, less willing to compromise on one of the biggest unresolved issues — fish.
The reasons for this are narrowly electoral too. Macron has always been unwilling to sell out French fishing communities. But his room for maneuver has diminished even more as public confidence in his government’s handling of the coronavirus crisis has fallen.
But fish is not the only reason why Macron — a “scrapper” rather than a peacemaker — may balk at Brexit terms acceptable to Germany and others. France is determined that the level playing field rules imposed on Britain should be tough and enforceable.
Macron’s belief in a “strategic Europe” is economic as well as diplomatic. His vision of a European industrial and innovative powerhouse, capable of remaining independent from the U.S. and China, is incompatible with a future few-rules Britain that would act as an “unsinkable aircraft carrier” for continued American or Chinese economic domination of the EU27.
Macron and Merkel look at negotiation documents during a summit in Brussels | Pool photo by John Thys via Getty Images
Meanwhile, Merkel does not want an internal EU civil war over Brexit on what remains of her watch. “Merkel will want her legacy,” said the senior German official who knows her well. “And her legacy will be that she won’t have allowed a split in Europe.”
This tension in Berlin — between seeking a deal while maintaining EU unity — will be critical to the pressure Merkel eventually brings to bear on Macron. She will be supported by European Commission President Ursula von der Leyen, who privately wants a deal, to ensure that her own political priorities and legacy, notably on the green transition and digital economy, are not overtaken by a no-deal crisis. But von der Leyen also owes her fidelity to Macron: She is where she is because he put her forward as Commission president when post-election negotiations deadlocked last year.
A meeting in Gransee near Berlin on June 29 | Pool photo by Hayoung Jeon via Getty Images
The problem in the end — maybe not this week, but eventually — will be the vanity or antagonism of small differences. By that, I mean seemingly small divergences that are not so small from differing national viewpoints.
Macron cannot afford to seem petty. Nor can he afford to talk a strong EU game and then fold — as he has in the past.
Difficult decisions await. The U.K. may make it easy for Europe by continuing to drag its feet on state aid, allowing Barnier to brief EU leaders that London has not moved far enough. Some senior EU officials even hope for this outcome.
They do so in the knowledge that a difficult reckoning between Paris and Berlin otherwise looms — and that the outcome is far from obvious.