Mishcon de Reya page structure
Site header
Main content section

Brussels Insider: A beast of a week

Posted on 2 March 2018

Brussels Insider: A beast of a week

This week is turning out to be a beast of a week for Brexit. We started with a speech by Labour leader Jeremy Corbyn advocating remaining in the customs union and single market for the transitional period, followed by formal negotiations in Brussels and a further speech by international trade secretary Liam Fox commenting that remaining in the customs union would be “a complete sell out of Britain’s national interests and a betrayal of the voters in the referendum”. Still to come this week is a bi-lateral meeting between UK PM May and EU Council President Tusk, another UK cabinet meeting and another set piece speech by May.

Despite the confluence of activity in London and Brussels, there are potentially bigger events and challenges for the EU and for Brexit happening elsewhere: namely in Italy and Germany.

Italians go to the polls on 4 March. It’s going to be a close run thing, with some form of coalition government seemingly the most likely outcome. Italy is keen to maintain close ties with the UK post Brexit, but not at the expense of its place in Europe. Polls suggest that a change to a centre-right led coalition government is likely, which might further enhance Italian support for the UK and weaken support for EU (if anti-EU forces are prevalent in influential coalition and ministerial posts). Even so, for Italian politicians as for other EU Member States, managing domestic versus EU tensions remains a higher priority than showing support for the UK.

In Germany the SPD party is again in the spotlight with the result of a crucial party vote on the recent coalition deal to be announced on 4 March. If adopted, Germany's vaunted political stability will be back, allowing a Merkel led grand coalition (“Groko”) to get back to work, albeit weakened. A new coalition would allow Germany to focus on the EU again - positive for the UK even if the future of Europe (rather than Brexit) is Merkel’s top European priority.

If however the SPD membership rejects the deal, instability will continue, with a minority government or new elections the most likely outcomes. Such a scenario would push Europe further down the German list of priorities, with Brexit quite possibly dropping off the priority list almost entirely.

So while British politicians debate the pros and cons of managed divergence and customs unions and EU officials sweat over legal drafting of withdrawal agreements and transitional arrangements, many EU leaders are more concerned about what happens in Berlin and Rome on Sunday. Missives from London or Brussels – and the beast that is Brexit – matter rather less.

You can subscribe to receive this briefing via email here.

How can we help you?

How can we help you?

Subscribe: I'd like to keep in touch

If your enquiry is urgent please call +44 20 3321 7000

Crisis Hotline

I'm a client

I'm looking for advice

Something else