After Brexit: A Special Deal for the UK?

A Spiegel interview with British financial industry expert David Marsh in Spiegel International Online, August 2

MARSH: …We expect there’ll be another two and a half years before Britain leaves the EU. A lot can happen. European politicians’ ability to find compromises never ceases to amaze.

SPIEGEL: The UK is looking for a post-EU model. How would this look?

MARSH: It is certainly not like the Swiss model, nor Albanian, nor Greenlandic. I hope this doesn’t sound nationalistic – it should be a British way. There is a tendency in Germany to think that the British always want special treatment – and that is true: We want special treatment.

SPIEGEL: And what does this consist of?

MARSH: We need to manage a compromise between our expectations and the EU’s: We will still pay into the EU budget, but significantly less. We will control immigration more rigorously. And we want to maintain access to the EU internal market.

SPIEGEL: Do you really think Europe will allow this? If so, then EU critics in the Netherlands or Austria will wish to emulate this British model and leave the EU.

MARSH: That’s right; the EU can’t be too generous toward Britain. On the other hand, we have time on our side. Britain will probably not have a general election until 2020, while the German, Dutch and French will all go to the polls next year. Prime Minister Theresa May has time to develop Britain’s European position. She can build on the UK’s special status outside the euro area, where we are one of the largest trading partners. We will find a form of British exceptionalism. Frank Sinatra’s “I Did It My Way” may become for the UK, “We did it May way.”

SPIEGEL: What might this “May way” look like? Will the UK turn itself into a low-tax paradise with minimum regulation?

MARSH: We will certainly not become a European version of the Cayman Islands – we cannot afford that. Banking regulation should be at least as strict as in the EU. The financial crisis has taught us that less regulation leads to poorer results.

SPIEGEL: There are a lot of similarities between the prime minister and Chancellor Angela Merkel; this was obvious when May visited Merkel on July 20 in Berlin: they are of a similar age, similar origin and they are similarly pragmatic. Will that help British negotiations?

MARSH: There is good chemistry between the two. You can talk of “Angela May and Theresa Merkel” as Europe’s new tandem. Yet the chancellor faces the tougher task. Her room for maneuver is narrowing, the more she faces Europe’s economic problems: the debt issues in Greece, the banking crisis in Italy, the monetary policy of the European Central Bank….


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