How Long Will German Businesses Put Up With Merkel?

At every juncture, EU officials thought, and behaved, as if the UK was bluffing. The big irony is Merkel and the EU are bluffing, not the UK.

How long will German businesses put up with Merkel before her anti-cherry picking charade blows sky high?

Before addressing the question let’s step back and recap how wrong the EU has been every step of the way.

Wrong Six Times And Counting

1. The EU though Cameron would never hold a referendum.
2. The EU thought it would never pass.
3. The EU thought Cameron would never let Brexit happen after the vote was in.
4. The EU thought that Theresa May would quickly reverse Cameron.
5. The EU though Theresa May would eventually cave into EU solidarity.
6. The EU still thinks the UK has more to lose and Theresa May will come to her senses.

Hello EU, the UK Isn’t Bluffing

All along the EU acted as if the UK was bluffing.

If the EU had a little more common sense and a lot less arrogance at step 1, Brexit might not have happened.

That’s all history. We are at point 6 now. But it’s not the UK that needs to come to its senses, it’s the EU.

How many times does one have to be proven wrong before reality sets in?

Touchy-Feely Kumbaya

After the vote, the EU held a big touchy-feely kumbaya with 27 nations all insisting that the UK must adhere to the EU’s “four principles” and that “no cherry-picking” will be allowed.

It was not May’s decision to have a “hard Brexit”, the UK crammed that stance down May’s throat by its negotiating stance. Add that thought to the growing pile of ironies.

“The be-all and end-all is that Europe doesn’t let itself be divided,” said Merkel.

Excuse me, isn’t the UK part of Europe and isn’t it about to split from the EU?

Four Freedoms

1. The free movement of goods.
2. The free movement of services and freedom of establishment.
3. The free movement of persons (and citizenship), including free movement of workers.
4. The free movement of capital.

For starters, the EU has trade treaties with the US, China, Japan, and elsewhere. It does not impose four freedoms in any other relationship, but it expects the UK to abide by them.

The worst of the hypocrisy is the EU does not honor it’s own rules. I discussed how the EU violates every one of those principles in Brexit is a Religious Battle (And You Can’t Negotiate Religion).

Germany is arguably the worst of the offender, especially in regards to free movement of services. Oops, add that to the list of ironies.

Merkel’s Solidarity

EU officials are unanimous is spouting “the UK has more to lose”. Really?

EU Prison Run by Germany for Germany

Jean-Claude Juncker and Angela Merkel want to make the EU a prison.

Countries singing kumbaya with Merkel ought to take a good long look at who benefited from European solidarity and who didn’t.

UK Escapes Prison

1. The EU agricultural tariffs are a nightmare.
2. The EU rules and regulations are a nightmare.
3. The EU was never going to be satisfied with a “two-speed” Europe.
4. There would have been constant pressure for the UK to adopt the Euro.
5. The UK made a smart move to leave

Brexit Tax

Please consider:

The European Union could impose taxes on citizens of member states under radical proposals to help make up a funding shortfall in the wake of Brexit.

Brexit is a key factor driving the proposed reforms as the EU looks to fill the gap in its budget that will be left by the UK’s contributions, an estimated £8bn a year.

One proposed tax in the report is EU-wide VAT of 1 or 2 per cent, which would be deducted from national VAT and paid directly to Brussels.

Germany Investment in UK Will Go Poof

The UK’s €8 billion annual contribution to the EU is peanuts compared to €120 billion German businesses invested in the UK.

From Der Spiegel, translated from German:

An Great Britain exit from the EU would hit German companies hard. They invested around 120 billion euros in the country. A large part of this would be lost through a Brexit, warned Volker Treier, the deputy chief executive of the German Chamber of Industry and Commerce (DIHK). To date, German companies have set up production and operations in the UK worth 120 billion euros, employing some 400,000 people there.

Who Has More to Lose?

1. German businesses: €120 billion in investments.
2. EU budget: €8 billion.
3. Germany runs an export surplus to the UK to the tune of €51 billion.
4. The rest of the EU runs another €40 billion or so trade surplus with the UK.
5. The UK has already lowered its corporate tax rate to the EU’s ire and may do so again if Brexit talks turn nasty.
6. France wants to take London bank jobs. There were announcements on Thursday. But are French banks in any shape to go on a lending spree? The entire Eurozone banking structure is suspect. The may take some London jobs, but what about lending?
7. Euroscepticism is on the rise in Italy, France, Greece, and even Germany. In particular, Italy is a huge tinder pile of fat-wood waiting for Beppe Grillo to light the match. Trade wars will not help one bit.

The amazing thing is the EU talks as if it has the upper hand. Are they really that stupid or is it a transparent bluff?

Regardless, the above list is one hell of a price to pay to insist on “four principles” that Germany and the rest of the EU don’t even honor themselves.

So, how long will it be before German businesses pound some sense in Merkel’s head?