The UK and EU are crawling closer toward a no-deal Brexit despite the coronavirus pandemic having stolen valuable negotiating time. The two parties are now back at work trying to reach an agreement and many European states wish to see a deal succeed. After all, many EU economies depend on trade with London, particularly Germany’s.

A Call for Unity

Berlin, however, is pessimistic on the two sides reaching a compromise before the EU withdrawal date, a document leaked to Reuters revealed. According to it, Germany is alerting its fellow EU states of the need to draft plans for “no deal 2.0,” despite British Prime Minister Boris Johnson’s aspirations for a deal to be reached in July.

“From September, the negotiations enter a hot phase,” the document read. “Britain is already escalating threats in Brussels, wants to settle as much as possible in the shortest possible time and hopes to achieve last-minute success in the negotiations.”

Notably, the German Foreign Office maintains a deadline for a deal as the end of the year with no extensions. 

“It is therefore important to preserve the unity of the 27, to continue to insist on parallel progress in all areas (overall package) and to make it clear that there will be no agreement at any price. Therefore, both national and European contingency planning would now have to start in order to be prepared for a no deal 2.0.”

It warns of London’s ambitious plans to quickly forge economic and security agreements before the negotiation stage expires. The EU must continue to act as a single entity with a coordinated message, according to the leaked document.

Although Brexit talks are running out of time, Germany believes “The situation is less serious than in 2019, as important regulations — for example, for citizens — were sorted out in the withdrawal agreement.”

Avoiding Hasty Deals

Therefore, it is up to Berlin to hold the line for the missing components and not allow European states succumb to British pressure for hasty solutions. Germany will be at an advantage soon as it assumes the presidency of the European Council on July 1, as POLITICO reported. Even though the negotiation goals are unlikely to change, Berlin can lead from a position of power and ideally unify the bloc under a cohesive message.

As the Brexit date approaches, some states may be prone to consider deals with London as they consider the future of their economies post-Brexit. However, Germany stands to lose the most with a no-deal solution as its economy revolves heavily around exports. British officials have been counting on German Chancellor Angela Merkel to cut a deal to help own nation first and foremost.

“Angela Merkel has historically shown herself to be a pragmatist and less doctrinaire than, for example, [French President Emmanuel] Macron,” said British Conservative MP David Jones, deputy chair of the European Research Group of Brexiteer backbenchers. “She recognizes the reality of the U.K.’s departure and understands the mutual importance of Anglo-German trade. I would expect the German presidency to reflect Merkel’s pragmatism; it comes fortuitously in the final stages of the future relationship negotiations,” he added.

However, Brexit lawmakers are mistaking Berlin for putting itself ahead of the collective EU bloc. Even British industries have signaled they prefer to focus on preserving EU trade before risking a hasty deal with London.

“The priority that businesses are telling us is the priority of the European single market. Anything that undermines the internal market — which is already under enough pressure from the coronavirus crisis — or anything that possibly attracts imitators, should be rejected,” said Volker Treier, head of foreign trade at the German Chamber of Commerce (DIHK).

VDA, a Germany-based car lobby, echoed the sentiment in a press release declaring that while dealmaking with London is threatening businesses, it is more vital to preserve unity among the EU.

An Issue of Governance

The most divisive issue presently coming between London and Brussels is a dispute resolution mechanism. The EU wants to have an all-encompassing system that can have jurisdiction across every industry, while the UK is insisting on separate agreements according to each industry.

“Governance may sound like an issue for bureaucrats,” said European Commission President Von der Leyen. “It’s not. It is central for our businesses and our private citizens both in the UK and in the European Union. It is crucial to ensure that what has been agreed is actually done.”

A lack of discussion on security and defense cooperation have similarly created an impasse between London and Brussels. The UK refused to even consider proposals related to them, according to EU chief negotiator Michel Barnier. The unwillingness to discuss vital topics has the potential to delay Brexit talks further.

Brexit discussions under German leadership will continue to create a barrier that London will find difficult to surmount. The UK must be willing to concede in some way to allow the EU flexibility to create a workable deal. It is evident from the leaked German document that Berlin expects London to remain obstinate and consequently, the EU must face the reality that a no deal Brexit is more likely now than ever.