Peter Rall, Head of Newington’s German Partner Agency, Kohl PR, shares his thoughts on how Germany views Brexit.
The European spirit will survive Brexit
The memorial service for former German chancellor Helmut Kohl recalled what seemed to be forgotten after the vote for Brexit: Europe and the EU is about much more than bureaucracy or endless quarrels among the member states. Europe also stands for a spirit, for democracy, open borders and the absence of war during a record period of more than 70 years. These values are often forgotten as we go about our daily business. But they are alive among the younger generation. For many young people in Germany and other member states, Europe is a vital part of their lives. In the UK the majority of young people voted against Brexit. Europe may change politically within the next two years. But the younger generation in all countries are the guardians of a European spirit fostered over decades which will not easily be lost.
However, the forthcoming negotiations about Brexit will be tough. Angela Merkel has warned the British against taking up illusory positions. In the run-up to the negotiations she highlighted several core issues. One of them was the concerns about the resident status of EU citizens living in Great Britain, especially the status of about 100,000 Germans residing there. Other issues concerned the prevention of damage to the European Union and the maintenance of legal security for business.
In particular, this last point concerns the German economy. Great Britain is Germany's third largest trading partner. More than 2,500 enterprises have subsidiaries there. They employ around 370,000 people – more than one percent of the total number of employees in the UK. For German companies there are currently more questions than answers. Thus, they keep a low profile and wait. German business hopes that the negotiations between the EU und the UK will provide an early picture about how Brexit will develop, as for them certainty around their planning is crucial. In particular the possible future introduction of trade barriers creates insecurity. The longer the period of uncertainty persists, the longer companies will be reluctant to invest.
Of course there are also hopes that Germany will benefit from Brexit. Optimistic assessments assume that around 10,000 jobs in the financial sector could be relocated from London to Frankfurt. Moreover, German companies see a chance to improve their competitive capacity in relation to British companies after Brexit. Some do not even rule out British companies investing in Germany creating new German jobs.
Yet whatever the result of the negotiations the EU will not remain the same. This is not only because many Europeans will miss the UK (including the author). Fear is spreading that some EU members could take Brexit as a precedent for their own exit strategies. Some of the 27 EU members have very diverging objectives regarding the further development of the EU. But the slowest must not be allowed to set the pace. Merkel and the new French president Emmanuel Macron seem to be determined to further promote the European Union. Maybe the price will be a two-speed European Union. But this again could raise questions regarding tariffs and other trade barriers.
If you are concerned by Brexit, speak with Newington Managing Director Naomi Harris, head of our Brexit practice and a gateway to the more than 200 consultants in our partner agencies across Europe, by emailing [email protected] or calling 0207 234 3333.
