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Wednesday, April 09, 2014

Anglo-German partnership on EU reform could prove crucial at the negotiating table

Die Welt's Economic Editor Tobias Kaiser has an opinion piece in today's paper entitled entitled “Stay with us, Brits”, in which he argues that:
“Berlin needs London as a partner in the fight for fiscal reason [in the EU].” 
Kaiser highlights that:
“Berlin and London have to put their ideas of Europe against the French coined version of European etatism... The openness of the European economy has to be guaranteed and the protectionist regulations and national rules – which still prevent the development of a genuinely free exchange of goods, people, and ideas within Europe – have to be dismantled.”
This is an argument we have been making for a while. In 2012, following the election of Francois Hollande as French President, Open Europe Director Mats Persson argued that:
"Hollande simply rubs the Germans up the wrong way. His spending rhetoric is an outright challenge to German Chancellor Angela Merkel’s vision of a euro firmly grounded in Prussian budget discipline."
"Therefore, though it won’t be easy, the scope for a new bargain between London and Berlin – based on Britain needing new terms of EU engagement if it is to remain inside, and Germany needing the UK’s quiet support for a more economically sustainable euro – is possibly greater than ever."
While Hollande's push against austerity has waned, the process of Anglo-German cooperation has gained pace - exemplified by the recent joint op-ed in the FT where George Osborne and Wolfgang Schäuble agreed on the need for safeguards for the single market in the face of tighter political and economic integration in the eurozone.

Kaiser's call for greater economic openness within the EU also echoes the argument in favour of greater services liberalisation by Die Zeit's London correspondent John F. Jungclausen, who cited Open Europe's report which found that removing barriers to cross-border services trade could alone produce a permanent increase to EU-wide GDP of up to 2.3% or €294bn.

It's good to see the process beginning to bear fruit and gain wider traction in the German media, particularly on the specific areas where reform is necessary. As we pointed out ahead of Chancellor Merkel's recent visit to the UK, there is scope for a wide ranging 'Anglo-German bargain' in areas such as EU migrants' access to benefits, greater powers for national parliaments, and the devolution of some EU back to the national or local level. According to a recent Open Europe/YouGov poll, an EU reform agenda built on these pillars would enjoy significant public support in both countries.

With all this in mind, now would seem the perfect time for the UK government to begin road-testing specific reforms in Germany and other countries. 


Denis Cooper said...

"Berlin and London have to put their ideas of Europe against the French coined version of European etatism..."

"Berlin" and "London" may or may not have the same "ideas of Europe" to be contrasted with "the French coined version", but "London" certainly does not have the same "ideas of Europe" as the British people and the "ideas of Europe" entertained by the British people contrast dramatically with the "ideas of Europe" that are prevalent in "Berlin", and apparently also among the German people.

You highlighted the difference in views between the British people and the German people in a recent blog article:


Look at that great purple block of the Germans who want more EU integration, 38% you say, rather than just 10% of the British people.

We, the peoples, do NOT agree on this, and no matter how much our respective political leaders may pretend that there is a lot of scope for an Anglo-German alliance there very clearly is not, at least not if the different wishes of the British and German peoples are ever to be taken into account.

But who cares about that, eh?

jon livesey said...

Nice piece. I would only add that not all questions and reforms need to be addressed at once.

Devolution of powers is in itself a mechanism for reform. Give powers back to national Parliaments and they will decide.

I think we sometimes forget that the geographical area that makes up the EU is anything but homogeneous. Given devolution, countries like the Netherlands, Denmark and Austria would almost certainly choose to go on sharing a currency and a customs union with Germany. The UK would probably choose neither. Spain and Italy would likely choose a euro-lite. France I find impossible to predict.

But freedom to choose beats any amount of collective argument and angst.

Anonymous said...

The people of Germany and the UK may agree on some aspects such as the problems created by unfettered migration, but the central governments do not agree with their own people on the problem and have diverse views with each other on how the eussr should proceed. The people would happily just be in a trading bloc without the unneeded political aspect, but to achieve that both Germany and the UK need to leaven aybe both should then going EFTA.

Average Englishman said...

This is all still fiddling around the edges of the problem, which is that the EUSSR is a fundamentally undemocratic organisation that has its main aim as 'ever closer union'.

I do not see anywhere an intention by Germany, the UK or any other country to change either the fundamental aims of the EUSSR or its basic construction.

So, it's all just more fluff and nonsense over cups of tea and coffee in London and Berlin. More smoke screen, more spin, more of the same.

No thank you. The game is up. Bring on the UK referendum.

christhai said...

So Merkel leads Cameron who is hyper-desperate for a lifeline to save his sinking "Reform of the EU" false promises.

It is NOT going to happen.

Any changes will NOT be fundamental or even significant.

Germany's in the driving seat. Berlin holds the whole EU to ransom.
Think just for a minute what Germany did to the democratically elected Government of the Ukraine.

Cameron doesn't want to leave the EU - he cannot. The EU have him by the cojones well - if he had any.

The ONLY way to break free of this Mafia, this criminal organisation - the EU.

Is to invoke article 50 - with the proviso that at the FIRST sign of the natural treachery of the Commission - the European Communities Act will be repealed.

Cameron is going down.

Thank God.

Anonymous said...

Or alternatively let's get the perfect solution for us (and not some stupid nonsense - read fudge)
and LEAVE.

Let's leave the useless EU bureaucrats to spout hot air for another few years and come up with jack.

Why wait?


christina speight said...

Denis Cooper and Christhai are right. Germany and Britain may have lots of things we agree about BUT in the end THEY want IN and we (assuming we don't the reforms we want) will want OUT. So please OE stop fudging and tell the stark truth - PLEASE!

Freedom Lover said...

Why does Germany want Britain to stay in the EU? Because it wants everyone who is already a member to remain in, whoever they are. Why? Because without us (&/or any other somewhat reluctant EU members), the German economy will become/remain grossly over-dominant.

Germany is the only really competitive economy in the eurozone, with its apparently permanent export surplus. So it can't permit any other eurozone members to leave the EU or eurozone either, & thereby escape a hideously uncompetitive situation by devaluing. But if enough EU countries, especially eurozone ones, do this, then Germany would be left with a grossly over-valued euro, or alternatively a revived Deutsche mark if Germany itself left the euro, & unable to sell its over-priced exports in competition with any devalued former eurozone or EU members. So Germany is looking after itself when it appears sympathetic to Britain in the EU. It's nothing about being a friend at all! Just self interest. No more, no less!