Germany Is One of the Biggest Brexit Losers

(Bloomberg Opinion) -- A somber feeling is spreading among Germany’s elites, as the long-term implications of Brexit sink in. Of the European Union’s 27 member states, Ireland obviously has the most to fear from the U.K.’s departure. But Germany may be second. That’s because Brexit changes not only the remaining EU but also Germany’s role within it — and in ways the Germans have for half a century been trying to avoid.

European integration, starting in the 1950s, was for West Germany a way of atoning for its own nationalist and belligerent past. Its citizens were eager to subsume part of their identity in a “post-nationalist,” rules-based, non-militarist and largely mercantile entity, in return for being accepted again by their neighbors. Occupied by three of the Allied Powers, they didn’t have full national sovereignty, so they didn’t worry about ceding more of it to Brussels.

To move this European project forward, the Germans relied on different kinds of support from the Allies. To build the structures that later became the EU, they needed France. The French, however, especially under President Charles de Gaulle, saw “Europe” differently: as reconciliation with Germany, yes, but also as a new vector to project French power, the better to keep the mightier “Anglo-Saxons” at bay.

Those Anglo-Saxons were of course the U.S. and the U.K., the other two powers the West Germans needed. The U.S. protected them against the Soviets, and kept international order generally. And the Brits were basically a smaller, more familiar — and European — version of the Americans, and thus a welcome counterweight against the French.

In fact, German Francophilia was always less a phenomenon than a policy, imposed top-down; by contrast, German Anglophilia spread from the bottom up (even if it wasn’t often reciprocated). It helped that the Brits after the war competently ran and rebuilt northwestern Germany — the ancestral homelands, as Germans noted tongue-in-cheek, of the Anglo-Saxons and the Hanoverian kings of England. Once the Beatles showed up in Hamburg, it was basically love all the way.

The West Germans also had political motivations for wanting to hug the U.K. inside the European club, against the stubborn resistance of de Gaulle. Germany and France have always had clashing economic traditions. The French one, called dirigisme, is based on state intervention and looks askance at free markets and free trade. The German one, called ordoliberalism, is based on restricting the state to narrow functions (such as antitrust) and otherwise leaving markets and trade pretty free.

The Germans thus saw the Brits, like the Dutch, as more naturally aligned in values than the French. Having the U.K. in the club meant that the “north” could gang up in the Council of Ministers (the body in Brussels where member states decide policy). And it did. A fluid “Nordic” bloc has usually had enough votes to veto “southern” ideas it didn’t like, even as the European club expanded its membership. Projects driven primarily by the Brits and Germans include the single market, rigorous competition policy and liberal trade deals. Projects they successfully prevented (at least until now) include a European “industrial policy,” which tends to be French code for coddling national champions.

Brexit means that the center of gravity in the EU has now shifted southeast, in the European Parliament but above all in the Council. With the U.K., the north (defined as Germany, Sweden, Denmark, Finland, Ireland and the Netherlands) had a blocking minority of 36.8%. Without the U.K., that share has dropped to 27.8%, too small for a veto. Even when Austria and the Baltics are included, the north can now be overruled.

Other fault lines crisscross this political geography that are just as treacherous for Germany. They run not only between north and south but also between west and east.  For example, the Visegrad four (Poland, the Czech Republic, Slovakia and Hungary) have joined to reject the EU’s migrant policy, which they see as dictated by Germany after the refugee crisis of 2015, and they’ve rallied support from Germany’s traditional partners, such as Austria. Depending on the issue, other alliances are constantly taking shape, often aimed against the largest member state, Germany.

Geographically and politically, Germany thus finds itself, once again, squeezed in the uncomfortable middle. Historically, this tension is known the German Question and has repeatedly led to troubles. Owing to its “awkward scale,” as one former West German chancellor put it, Germany was always either too weak (in the 17th and 18th centuries) or too strong (in the late 19th and early 20th) for the continent to be stable. Other powers either ganged up against it or were dominated by it. As the writer Thomas Mann memorably put it, the continent is forever condemned to choosing between “a German Europe” or “a European Germany.”

Having the U.K. in the EU mitigated that dilemma. Britain was weighty enough — economically, demographically, militarily — to balance Germany, France and the continent. And nobody was happier about being balanced than the Germans, for the last thing they want is to be forced to lead, knowing that this will invariably rekindle old resentments against them. Brexit means that balance is gone again. The German Question is back.

The Brits shouldn’t have been surprised that Germany wasn’t more forthcoming during Brexit negotiations; for Germans, the cohesion of the EU, and the relationship with France, simply takes precedence. Nonetheless, many Germans have regrets. Some are pushing for a German-British Friendship Treaty to complement whatever deal the EU and the U.K. come up with. Unspoken is an almost primal plea: Dear Brits, please don’t leave us continentals to ourselves. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Andreas Kluth is a member of Bloomberg's editorial board. He was previously editor in chief of Handelsblatt Global and a writer for the Economist.

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