terça-feira, 21 de junho de 2016
Germany wakes up late to Brexit risks
Germany wakes up late to Brexit risks
The UK leaving the EU makes no sense to Germans, who dismissed the idea as British eccentricity. But now it’s all too real.
By MATTHEW KARNITSCHNIG 6/22/16, 5:36 AM CET
BERLIN — Germany’s attitude toward Brexit can be summed up in a single word: denial.
On the rare occasions Germany took notice of the U.K. referendum in recent months, it was to dismiss it as yet another British eccentricity, like baked beans for breakfast or cricket.
With the polls too close to call and a decision just hours away, Germany is still hoping for the best. Trouble is, the EU’s biggest country is nowhere near prepared for the worst.
Unlike the French establishment, elements of which would welcome Brexit, the Germans are terrified by the prospect. The consensus in Berlin is that both economically and politically Brexit would be, in the words of Finance Minister Wolfgang Schäuble, a “disaster.” He once even compared Brexit to “walking into a roomful of dynamite with a lit candle.”
The U.K. is Germany’s third-largest trading partner after the U.S. and France. It accounts for about 8 percent of German exports. Brexit could cut German GDP growth by half a percentage point next year, the Berlin-based DIW economic institute warned this month. That estimate only looks at the direct impact on exports, not the indirect fallout from broader market turmoil.
“Supporters of an EU with the U.K. have it much easier. They have facts to work with” — Die Zeit
Beyond the economic impact, Brexit would also rob Germany of a key ally on governance issues such as budgetary discipline. Over the years, the U.K. has been an important counterweight in Berlin’s struggle against the aspirations of France and other Mediterranean countries for common debt issuance and other steps to collectivize members’ financial obligations.
Brexit would be such a fiasco for the European economy that most German elites refused to take it seriously. The Brits, they reasoned, may be quirky at times, but they aren’t crazy.
“Supporters of an EU with the U.K. have it much easier. They have facts to work with,” the weekly Die Zeit argued in a recent commentary.
Behind the German refusal to countenance Brexit is a simple conviction: It makes no sense.
In the eyes of the German establishment, the U.K. already has the best of both worlds. The country is outside Schengen and the euro, yet enjoys all the benefits of full EU membership, from the common market to farm subsidies. And unlike its oft-cited models for a third path, Norway and Switzerland, the U.K. has a vote and considerable influence within the bloc.
That a country would give all that up to preserve some vague notion of sovereignty or to keep out migrants is unfathomable to most Germans. Indeed, nearly 80 percent of Germans don’t want the Brits to go, according to a recent poll by TNS Forschung.
Until recently, Germans largely ignored the debate. In newspapers, the story was relegated to the back pages. Even Angela Merkel didn’t seem to take it all that seriously. At the European summit in mid-February, at which EU leaders agreed to a set of measures designed to keep the U.K. in, Merkel was focused on the refugee crisis. When it came to making the case for a new deal for the U.K., she let British Prime Minister David Cameron fend for himself.
David Cameron speaks with German Chancellor Angela Merkel during an EU summit meeting, at the European Union council in Brussels, on February 18, 2016 | Stephane De Sakutin/AFP via Getty Images
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That’s changed. Merkel, worried that a forceful intervention could backfire, has voiced support for the U.K.’s continued membership but has largely steered clear of the debate. Schäuble has been more forceful, warning the British that “out is out.”
The German public, meanwhile, has awoken to the threat. The cover of last week’s Der Spiegel featured the Union Jack with the headline “Please Don’t Go” in both English and German. Inside, the magazine offered a breathless “appeal” for a Remain vote.
“Were the British to leave the EU, it would be a threefold catastrophe: bad for Germany, bad for Britain and cataclysmic for Europe.”
Threats to business
Big German companies with important U.K. operations, such as Siemens and BMW, have become so worried about the outcome in recent months that they took the unorthodox step of wading into a highly charged domestic political debate.
The “uncertainty, and threat of increased costs, could make the U.K. a less attractive place to do business and may become a factor when Siemens is considering future investment here,” Siemens said in a statement.
The German boss of BMW-owned Rolls Royce went a step further, telling workers in an open letter the company’s “employment base could also be affected.”
One reason Berlin is unprepared for Brexit is that the country’s politicians don’t agree on what to do if it actually happens.
“We couldn’t simply call for more integration,” Schäuble told Der Spiegel this month. “That would be crude.”
But European Digital Economy Commissioner Günther Oettinger, like Schäuble a member of Merkel’s Christian Democrats, told POLITICO last week that Brexit could help centralize even more power in Brussels.
“My expectation would be that the European project would gather new dynamics,” he said.
The one thing German politicians do agree on when it comes to Brexit is that it could be a boon for Frankfurt. A perennial also-ran to London, Germany’s financial capital could get a big boost if European banks relocate staff to within the EU’s borders.
“Brexit is the best thing that could happen to Frankfurt,” a local newspaper recently concluded.