“Germany is desperately looking for friends. The National Rally is a Germanophobic party, and [Jean-Luc] Mélenchon on the Left has a history of anti-German outbursts,” said Charles Grant, head of the Centre for European Reform.
“But if you go behind the door of the EU and try to do bilateral deals, it always backfires. The Commission is too powerful to ignore,” he said.
Labour wants to start with the “easy win” of closer EU defence ties, hoping that this opens the way for better trade. There is a giant obstacle. Defence, too, is becoming a theological no-go zone.
Sir Jonathan Faull, a former director-general at the Commission and now at the Brunswick Group, said the EU is creating a new post of defence commissioner, buttressed by an ecosystem of industrial and defence procurement that is protectionist in character and is tied to the EU’s law-making machinery.
“Defence and security cooperation sounds easy and is necessary, but it brings in single market issues: the Commission and the European Court of Justice – things that the Brits don’t want,” he said.
“The rise of the protectionist Right and Left in Europe makes it even more difficult to be a ‘third country’. Is the UK inside the tent, or is it outside? In a way, Brexit hasn’t really started: the real dilemmas are yet to come as we diverge,” he added.
With a bit of give and take, Labour can hope for minor tweaks on vet controls, chemicals, rules of origin, product conformity, etc. One of the untold stories of Brexit is the trade damage to Germany as a result of barriers imposed by the EU itself.
“If you want to intensify your trade relationship with the EU – call us!” said Christian Lindner, German finance minister, last year, complaining about pointless obstacles that hurt both sides. Germany has lost export share to rivals in the UK, once its most profitable market for car sales. This has been an unforced error at a time when other global shocks are ravaging German industry.
