Germany the shepherd, Paris the adversary, Slovenia the thorn: City of London envoy Jeremy Browne lifts the lid on Brexit talks

 
Catherine Neilan
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Who is more likely to hold up progress in Brexit talks? (Source: Getty)

Progress in Brexit negotiations is slow, but where are the hold ups coming from? Both Brussels and the UK appear eager to pin the blame on the each other, but as the City of London's special envoy to the EU points out, it's not as simple as us against EU.

Jeremy Browne uses a two-scale system, considering how integrationist each country is and where they stand on free trade, to understand where national sympathies lie.

That pits France against us, he believes. "They are the least anxious [about Brexit] and see most opportunity to push the EU towards their end of the scale."

France - who Browne described as Britain's "adversaries" in a leaked memo - have set "the bar highest of all" when it comes to what sufficient progress actually means. While Germany might naturally lean towards France, its position is tempered by the fact it is "keener to shepherd the whole EU herd - and you can't be an outlier and also a shepherd".

Read more: City warned of "high noon moment" over euro clearing

Germany is also less consumed with desire to use Brexit to attract business and build influence. "Trying to enhance the status of Paris is an all-of-France national endeavour," Browne says. "Trying to enhance the status of Frankfurt is just a Frankfurt endeavour." Despite this, he doesn't expect Paris to succeed beyond attracting firms that are "already French in outlook". Germany will be a bigger beneficiary, although it's less nakedly pushing it.

"There's a bit of ambivalence in Germany about large scale financial services in any case - there is apprehension about behemoth financial services and the risk incurred by central government [but] they are hardline on issues like euro clearing, and the British not being seen to have their cake and eat it."

Germany is also the most emotional country about Brexit, Browne says. "They see the EU as a great project of healing the wounds of two World Wars, creating a monument to a higher ideal of human integration and cooperation," he explains. "The Germans talk about Britain leaving the EU as a betrayal of our grandparents' generation - and our grandchildren. They find conversations about trade stuff a distraction from what they regard as the higher ideal and are bewildered that the British don't see it that way."

And while the desire to "punish" the UK for daring to leave the bloc has fallen away since the Dutch and French elections failed to result in victories for nationalism, the remaining "absolutists" tend to be found in Brussels itself, Browne says.

Read more: City's top EU envoy slams "bewildering" Brussels approach to negotiations

So there are plenty of candidates to block broadening talks out to the all-important second stage, where we can finally discuss trade. As Browne notes that "'sufficient progress' is in the eye of the beholder".

This week has already seen the leaders of two countries - Slovenia and Ireland - insist not enough progress has been made, and Browne thinks Slovenia could be a thorn in Brexit's side, given its lack of trade with Britain.

The Dutch, Danish, Irish and Belgian have a much higher exposure "so there is also straightforward calculation of national interest", Browne says.

Ireland has the biggest stake in pushing forward trade talks, as it does more trade with Britain than any other single country and has a greater level of "cultural entanglement", as Browne calls it. "They are in a whole different order of exposure for anyone in the EU," he adds.

Ireland is also most closely aligned on the free trade principle, so "they are probably more accommodating on litmus test issues like euro clearing, although whether they see it as issue to go to stake on is another matter."

Despite identifying the various countries' nuances, Browne says it is still hard to decipher "the degree to which people are putting down pressure on negotiations, and the degree to which they are genuinely drawing lines".

"There will be an outward appearance of unity within the EU - obviously they need raise the stakes and keep the pressure up - but there are sufficient numbers within the EU who do want to move to stage two to make it a possibility."

The one area where there is unity is on the divorce bill - unsurprisingly, because you have countries like Poland which are huge beneficiaries and would like the status quo to remain, and countries like Sweden, who are concerned they will have to fill any gap left by the UK. "Unusually, they are both one in thinking that the more the UK stumps up they less they suffer," Browne says.

"There are areas where unity may break up, but everyone in the EU27 agrees they would rather have money from Britain than anywhere else."

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