Merkel Said to Be Wary of Hurting May as Her Ally Backs U.K.

(Bloomberg) -- Germany’s Angela Merkel is wary that pushing U.K. Prime Minister Theresa May too hard in Brexit talks could backfire, according to a person familiar with the chancellor’s thinking.

Chancellery officials in Berlin see a risk that excessive European Union pressure over the Brexit divorce bill could weaken May at home, said the person who asked not to be identified discussing private deliberations. If May were replaced, most of the likely successors are hardline Brexit backers.

Reflecting that caution, Manfred Weber, who leads Merkel’s Christian Democrats in the European Parliament and describes himself as “one of the more skeptical partners” on Brexit, met May in London on Wednesday, and his tone changed dramatically from just a day before.

“I saw today that there is a willingness to go further, there is a willingness to contribute to a positive outcome,” he told reporters. The U.K. has a “credible” position and “there are good arguments on the table from both sides.”

Britain has about two weeks to make a better offer on the contentious divorce bill or risk the humiliation of another EU summit where the bloc refuses once again to start trade talks for the post-Brexit era. The Sun reported Thursday that May was preparing to offer to cover additional commitments amounting to around 20 billion pounds ($26 billion). Meanwhile Politico said that EU negotiators were preparing to offer a Canada-style free-trade agreement, largely leaving out financial services. It cited scoping papers that rejected May’s request for a bespoke trade deal.

Following Weber’s positive response, May also made some headway on the home front, getting her flagship Brexit legislation through its second day of scrutiny unscathed . Pro-European members of her Conservative Party held back from rebelling and the most difficult issues, especially the proposal to write the date the U.K. leaves the EU into the bill, were put off to future votes.

German Cover

Merkel has made efforts before to support May -- whose position is perilous at the top of a divided Cabinet -- and stood out at the last gathering of EU leaders for her warm words to the U.K. premier.

While the German leader’s stance doesn’t let the U.K. off the hook, it might provide some political cover.

Weber was clear that the U.K. has to agree to pay its dues before leaders agree that “sufficient progress” has been made on the divorce for talks to move on to the future relationship. The U.K. has so far offered about 20 billion euros, which is about a third of what EU officials say is owed for liabilities agreed to while members that still need to be paid.

“If somebody is leaving the club he has to pay the open bill,” he said. “I see the will to talk about the issues. I don’t want to comment what she told me in the private dialogue, but I see that it’s clear there are points on the table. Their understanding of what sufficient progress means is on the same line.”

As recently as Tuesday, Weber said it was increasingly unlikely that talks would progress at the crunch summit in mid-December. Behind closed doors, Germany has consistently taken a tough line when diplomats discuss the EU’s joint position, according to people familiar with the talks.

Davis in Berlin

Brexit Secretary David Davis will visit Berlin to make a speech on Thursday, just as Merkel will be immersed in make-or-break party talks to form her next government. There are no plans for the pair to meet.

Britain’s exit, while regretted in Berlin, has been largely absent as a topic in Merkel’s four weeks of exploratory talks with the Free Democrats and Greens.

All of the potential coalition partners agree on the fundamental issues of Brexit, including the primacy of the European Commission’s role in negotiating. While the clock is ticking on Brexit, it’s ticking louder on Merkel’s imminent domestic deadline: she wants the potential coalition partners to agree on a framework for fully-fledged talks by Friday.

“Since there are no diverging views on Brexit among the parties, the issue isn’t playing a major role right now,” said Detlef Seif, a lawmaker from Merkel’s Christian Democratic Union involved in maintaining links with U.K. parliamentarians.

Seif’s view is that Davis has been “stonewalling” on the divorce bill. “The U.K. has to move. We don’t want a number, but we do want to see a calculation method.”

--With assistance from Alex Morales and Robert Hutton

To contact the reporters on this story: Arne Delfs in London at adelfs@bloomberg.net, Rainer Buergin in Berlin at rbuergin1@bloomberg.net, Birgit Jennen in Berlin at bjennen1@bloomberg.net.

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Emma Ross-Thomas, Tony Czuczka

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