Brexit: mind the gap

The German SPD must be cautious not to over promise and under deliver in its response to Britain’s exit from the EU.

The Brexit opens up a new policy space for the SPD. It can only profit from it, if it takes on a realistic stance with regard to the Article 50 negotiations, solves its inner-party contradiction concerning the future of the EU, wins the debate on stimulating growth – and if it puts policies to the forefront where Europe offers a visible extra benefit for the people.

Right after the smoke of the Brexit-big bang dissipated, German social democrats tried to seize the opportunity and set the SPD apart from the European politics of its coalition partner, the conservative CDU/CSU. This concerned both the handling of the Brexit and the subsequent question of the future of Europe. While the head of the chancellor’s office, Peter Altmaier, repeatedly suggested the Brexit was not a done deal (“Nobody knows what kind of conclusions the next British government will draw”), SPD leader Sigmar Gabriel said that the result of the referendum was unequivocal and should be implemented as soon as possible. Gabriel also summoned the other European member states to take a tough stance towards the UK in the upcoming negotiations about its future relationships with the EU. “First bargaining, then failing and afterwards clinging – this is the motto we should not follow”, he said, because otherwise, it would be an invitation to all other “national egoists” to try the same strategy.

And right on the day after the referendum, Gabriel already introduced far-reaching proposals for EU-reform, eg a new European investment programme for economic growth and active labour market policies. The conservative finance minister Wolfgang Schäuble took a completely different approach: for Merkel’s strongest conservative minister, this is “not the time for visions” but instead for pragmatism. According to him, the focus should be on tackling single problems such as the refugee crisis or youth unemployment in Europe.

Apparently, the SPD’s reaction to the Brexit struck a chord. The German public could never really relate to the “take back control” argument, and many people are truly disappointed about the decision of a country to leave the EU – especially one which had been allowed loads of cherry picking in the past anyway. “Don’t let the door hit you on the way out” sums up the mood among many Germans pretty well. Many on the left even feel some kind of relief, hoping that without the UK more growth-oriented policies and a better regulation of the financial markets will be possible. This atmosphere may be one of the reasons why in a poll undertaken five days after the Brexit decision, Sigmar Gabriel and the Social Democratic foreign minister Frank-Walter Steinmeier increased their popularity by four percentage points, with Angela Merkel losing spectacular six percentage points.

However, disregarding the short-term gains, the Brexit also poses risks to the SPD, which the party should be aware of if it wants to keep up its current momentum on European issues.

First and foremost, there is the risk of walking into a “delivery trap”, ie making promises and raising expectations the SPD cannot hold. For instance, calling on the UK to send the official exit request to the European council immediately is a hollow claim. Article 50 of the treaty of the European Union is crystal clear: “Any member state may decide to withdraw from the union in accordance with its own constitutional requirements.” The UK cannot be forced to make that move. Right now, the governing party is electing a new leader and prime minister, the Labour party is tearing itself apart, while the government institutions obviously lack a plan and the resources to steer the country through the upcoming negotiation process. Not stalling for time would be irresponsible, and every German politician would act the same way. Even if a time of uncertainty lies ahead, the other EU-member states and the SPD should be fair and realistic enough to cut Great Britain some slack.

Similarly, the call for a strong negotiation strategy may be popular and have its logic (preventing copycats), but it is an open question whether this kind of maximal position can be kept up once Article 50 is invoked. Although the UK will be in a weaker negotiating position than the EU 27, there is no certainty that all European member states agree on a coherent bargaining hand. Some countries have stronger economic and cultural ties with the United Kingdom than others, and they will want the country to stay as close to the EU as possible.

Apart from that, Great Britain is not Norway. It is the second largest economy in Europe, a strong military power, and it is an important bridge to the United States. Therefore, it has a lot on offer in the negotiations. With European firms begging for a single market access for the UK economy, it is likely that in the end some deal will be struck, maybe access to the single market under special terms in return for more security guarantees within the frame of Nato.

There is another interesting argument against insisting on the maximal position in the negotiations, which was presented by Cambridge historian Brendan Simms at a conference in Berlin: without single market access, the British economy may suffer in the short term, but it could still prosper in the medium term, for example as a kind of large European tax haven. This would deliver all anti-EU populists additional arguments that the exit from the EU is not only possible, but also a good idea.

The same sort of realism is needed with regard to the debate about reforming the EU. It is easy to postulate a deepening of the eurozone and the communitarisation of additional policy areas when you are a thinktanker in Berlin or a member of the commission staff in Brussels. Politicians are no technocrats, but liable to their voters. And the truth is that the British people in the referendum have expressed an EU-scepticism which is shared by many citizens in all European member states, even in Germany. Only a few of the EU 27 governments will feel like following steps of deepened European integration.

A process of humble rethinking of the European project is needed instead of hasty reactions. From this perspective, it was counterproductive that after the referendum two Social Democratic proposals on the future of the EU where presented. To make things more complicated, the two papers partially contradicted each other. While Martin Schulz and Sigmar Gabriel called for “re-establishment” of the EU, among other measures through transforming the European commission into a “real European government”, Frank-Walter Steinmeier and his French counterpart Jean-Marc Ayrault proposed a pragmatic way forward, suggesting a flexible handling of the different “levels of ambition” of the EU-member states. In the past few days, however, Sigmar Gabriel backpedalled on this issue. The party leader now calls for a “better Europe” which is supposed to be closer to the people, but not for “more Europe”.

For Gabriel, “better Europe” means the end of austerity and more public investments on EU-level as well as in the member states. The stability and growth pact should put more emphasis on the growth side, leaving “sufficient free space for a country-specific stabilisation and growth policy”. This sounds reasonable, but the problem is that while Germans have a positive outlook on “investing” money in infrastructure and education, the discussion on investments easily turns into a discussion about the so-called black zero – a balanced budget. 80 per cent of Germans are against taking on more debt.

Thus, it will be crucial for Sigmar Gabriel to stress his point that he wants to finance his new spending plan not through debt, but via combatting tax avoidance and fraud in Europe. Will he manage to turn the discussion away from the debate about the black zero and into a debate about fiscal justice? This is an open question. But for sure, Gabriel’s new proximity to Alexis Tsipras, who is still seen by the German public as an unreliable gambler and blackmailer, does not help Gabriel in his attempt to stand for stable finances and growth stimulus at the same time.

To sum up: The Brexit opens up a new policy space for the SPD. It can only profit from it, if it takes on a realistic stance with regard to the Article 50 negotiations, solves its inner-party contradiction concerning the future of the EU, wins the debate on stimulating growth – and if it puts policies to the forefront where Europe offers a visible extra benefit for the people.

A new initiative to get a grip on the refugee crisis and working closer on security, as proposed convincingly by Frank-Walter Steinmeier and Jean-Marc Ayrault, would be a good start.

This article first appeared at Policy Network as a contribution to State of the Left – Policy Network’s regular insight bulletin that reports from across the world of social democratic politics.


Michael Miebach

Member of the Board
Michael Miebach is member of the Board and Co-Founder of Das Progressive Zentrum. He studied political science at the universities of Göttingen and Berlin, as well as European Social Policy at the London School of Economics. Until 2017, he served as Co-Editor-in-Chief of the magazine "Berliner Republik". He works as a policy advisor at the German national parliament "Bundestag".

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