Germany’s Scholz Says EU Stands by Ireland in Brexit Impasse

(Bloomberg) -- German Finance Minister Olaf Scholz made it clear that the European Union is backing Ireland in the struggle to reach an agreement over the border with the U.K., the main sticking point for the British Parliament agreeing to the Brexit deal.

Chancellor Angela Merkel’s Social Democratic finance minister used an appearance at Bloomberg’s European headquarters in London to lay out his government’s perspective on Brexit’s economic impact. With no breakthrough in sight seven weeks before Britain plans to leave the bloc, Scholz said the current impasse and the lack of clarity on London’s position makes him “nervous” that a disorderly Brexit may be hard to avoid.

“The most difficult political question is the border between Northern Ireland and Ireland,” Scholz said. “It’s clear that the EU is supporting Ireland,” and the current agreement is “fair” for both sides.

Merkel is pressing urgently for a resolution on the Irish border backstop, the element of the long-negotiated exit agreement that’s been rejected by the British Parliament. She drove home her point earlier this week during a trip to Japan, insisting that a resolution to the backstop is possible without re-opening the hard-fought exit agreement, which she has ruled out.

‘A Question of Peace’

“If this is not solved, it’s not good if we look to the future,” said Scholz in a rare appearance by a European politician in London amid Brexit tensions. “It’s a question of peace if we are successful or not.”

With U.K. Prime Minister Theresa May traveling to Dublin this evening after meeting with EU officials in Brussels earlier this week, tensions are on the rise less than 50 days before Britain’s departure date, and frustrations have spilled into the open. European Union President Donald Tusk referred to a “special place in hell” for Britain’s Brexit campaigners.

Scholz said that while the financial industry is better placed to weather a disorderly Brexit, trade and industry will struggle more with the fallout because of the physical movement of goods crossing a border.

“The world is a bit different than most of the populists think,” said Scholz. “It is already a global world.”

To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net;Stephanie Flanders in London at flanders@bloomberg.net;Patrick Donahue in Berlin at pdonahue1@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Chris Reiter, Chad Thomas

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