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Analysis
UK and Germany 'looking beyond abyss'

UK and Germany 'looking beyond abyss'

Parliamentary impasse overshadows co-operation

by David Marsh in Berlin

Fri 29 Mar 2019

Germany and Britain are trying to look beyond the abyss to focus on areas for beneficial bilateral co-operation after the UK's planned withdrawal from the European Union. But a debate on 29 March at the Allianz Forum in Berlin, organised by the British Chamber of Commerce in Germany with OMFIF participation, was heavily overshadowed by the parliamentary impasse over departure.

Michael Schmidt, president of the BCCG, presenting to the audience at the beginning of the event the British embassy-OMFIF report on 'UK-German futures', said: 'I would like to introduce this report listing areas of future co-operation between Britain and Germany. To find positive concepts about the future is a much happier task than carrying out a separation.'

Speakers at the conference, organised to coincide with the long-planned day of UK departure, were divided about the implications for politics and economics of the continuing deadlock over when, how and even if the UK would leave the EU. Just a few hours after the conference ended Theresa May, the British prime minister, suffered a renewed parliamentary defeat on a third attempt to pass her Brexit deal through parliament. Members voted by 286 to 344 against the EU departure treaty, which if passed would have led to Britain leaving on a revised date of 22 May. Northern Ireland's Democratic Unionist Party, whose 10 members of parliament give May her House of Commons majority, maintained its opposition.

This means that, unless there is a further delay, the UK is due to leave on 12 April, potentially in disorderly fashion without passage of a withdrawal treaty.
Another possibility would be no Brexit at all, with the chances of a long-term postponement punctuated by another referendum or a general election.

Sir Sebastian Wood, British ambassador to Germany, speaking at the conference, highlighted areas like artificial intelligence, education and research where the two sides would continue to co-operate after Brexit. He defended the role of the British parliament in discussions over the withdrawal treaty, saying that the avid debates underlined that – contrary to some German suggestions – the UK was conducting a real debate on the matter. Critics who claimed that UK MPs were acting irresponsibly 'lacked respect' for the very real dilemmas many parliamentarians faced in balancing the personal, party, constituency and national interests.

Burkhard Balz, board member responsible for payments systems at the Deutsche Bundesbank, said the Bundesbank and Bank of England would continue to co-operate closely after Brexit, whatever the exact outcome of the withdrawal process. This summed up the general mood of the Berlin conference that the two countries would find a way through the impasse. But the longer the blockage continues, the worse will be the economic outcome.

David Marsh is Chairman of OMFIF.

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