Germany and France will offer Britain a limited free trade deal if the Government seeks to sever close ties with the EU, a leading expert on Europe warned today.
Charles Grant, director at the Centre for European Reform, laid out concerns after recent visits to Berlin and Paris.
“Germans are fed up Brexit has taken so long, but believe that transition period will have to be extended beyond Dec 2020,” he tweeted.
On the future trade relationship, he believes Berlin will “prioritise” seeking “level playing field” arrangements between the EU and UK.
He added: “If UK wants to diverge from EU rules ... it’ll be a threat and so it’ll be offered a thin ‘Canada Minus’ rather than a Canada-style FTA (free trade agreement).”
He stressed that French president Emmanuel Macron wants Brexit “done asap”.
“If and when it comes to negotiating a trade agreement, France will be very tough,” he said.
“Unless UK agrees to automatic aligning with EU rules on social/envt/state aid/some tax, UK will not get ‘Canada’ but a much less good deal, with tariffs. This is because France fears a super-competitive ‘Singapore-on-Thames’.”
He also warned of strained relations between Berlin and Paris, adding: “The Germans are fed up with Macron’s mercurial style, grandstanding and public criticism of them.”
He said Paris is in turn “fed up with Berlin blocking its plans, e.g. on Euro reform, so is starting to act unilaterally”.
He added that Brexit could upset this further and unbalance the EU.
Mr Grant said: “FRA & GER used to each work with the UK to create a balance v the other. Now they’ve only each other to get annoyed with. And other members are much warier of Franco-German dominance, without UK to temper FRA’s & GER’s influence.”
