Brexit negotiations: strengthen cohesion among the remaining EU Member States

The United Kingdom officially applied to withdraw from the EU at the end of March 2017. This decision is likely to be reinforced with the fresh elections to be held on 8 June 2017. There will be negotiations over the next two years as to how the interdependencies between the EU and the United Kingdom can be recalibrated. German business expects that the negotiations will lead to a fair outcome for both sides.

The next step will be the establishment of the negotiating mandate for the European Commission’s chief negotiator, Michel Barnier. The mandate will be based on the broad guidelines which the European Council adopted end of April 2017. In Tusk’s letter of response to May, where he confirmed the receipt of the letter, he also outlined the first fundamental parameters for the negotiations. The EU’s core priorities are:

  • to conclude a deep free-trade agreement,
  • to continue cooperation in the area of security policy,
  • to find solutions for EU citizens living in the United Kingdom and British citizens living in the EU, and
  • to give particular consideration to relations between the United Kingdom and the Irish Republic.

Tusk emphasised in his letter that the EU aims first to negotiate the operational details of the United Kingdom’s withdrawal before discussions surrounding the agreement on future relations are conducted.

Strengthen EU cohesion

BDA and BDI believe that these first guidelines for the negotiations are right. The aim must be to secure a fair deal for both sides. It is of decisive importance that the cohesion of the remaining 27 EU Member States is strengthened and any restrictions on the four fundamental single market freedoms (free movement of goods, persons, services and capital/payments) are ruled out from the outset. Each individual fundamental freedom on its own strengthens the European economic area but working together they deploy their full power to promote prosperity and have enabled the creation of the world’s largest common market.

Limit uncertainty for companies

At the same time, uncertainty for German companies must be kept to an absolute minimum. The EU and the British government should make it clear rapidly after the departure how they intend to place economic relations on a stable basis for the long term. The optimal solution would be a deep and comprehensive partnership, investment and trade agreement between the EU and the United Kingdom. For this to happen, a mutually agreed arrangement for the exit must be found over the next eighteen months so that a disorderly withdrawal is avoided and a solid basis is created for the future relationship with the United Kingdom.