Angela Merkel, the German Chancellor, met new Spanish Prime Minister Pedro Sanchez over the last two days, starting Saturday. The talks had a broad-ranging bilateral and European agenda, including migration, with Brexit on the menu, too, given growing speculation about a ‘no-deal’ United Kingdom exit outcome.
As Sanchez and Merkel know, the window of opportunity is rapidly closing in on the original October deadline for the EU and UK to agree to a withdraw agreement. Spain and Germany have so far been advocates of the tough position emanating from Brussels, and UK Prime Minister Theresa May is therefore pushing hard to get Sanchez and Merkel — alongside other key leaders such as French President Emmanuel Macron — to soften the stance of the EU’s chief Brexit negotiator, Michel Barnier.
Spain, the Eurozone’s fourth-largest economy, benefits, economically, from around 300,000 UK citizens residing in the country and has a significant trade deficit with the UK, which — other things being equal — favours softer negotiating positions on Brexit. Yet, this picture is complicated by other factors, including Gibraltar’s future.
Under the new Spanish government of Sanchez, it is not yet clear if Madrid will seek to veto a final Brexit deal over Gibraltar, but the previous administration did invite the British government to negotiations on the UK overseas territory on the southern Spanish coast, including proposals for joint sovereignty. In October 2016, Sanchez’s predecessor, Mariano Rajoy, told May that such a joint sovereignty model would — under a “hard Brexit” scenario, towards which Britain may well be heading — be the only way for Gibraltar to secure continued access to the European Single Market, which is key for its economy.
The scope for tension between Madrid and London is underlined by the fact that Gibraltar remains strongly opposed to enhanced political ties with Spain. The UK government has also previously indicated its strong opposition to Spain’s joint sovereignty proposals.
Madrid’s negotiating position towards Brexit is also shaped by the secessionist challenge from the Catalonia and Basque regions. Spain was strongly opposed to Scotland’s potential independence in the 2014 referendum, and will seek to scotch any attempt by that country, and also Northern Ireland, to receive any special status in the EU post-Brexit, which may complicate attempts to secure a breakthrough over the Irish border issue that remains one of the biggest areas of UK-EU disagreement.
What Spain’s position on Brexit underlines is how each EU state has distinctive political, economic and social interests that inform its stance on the UK’s exit. Thus, while the EU-27 has been remarkably unified to date in negotiations with London, each country’s position does vary according to factors such as trade and wider economic ties, patterns of migration with the UK, domestic election pressures, and levels of Eurosceptical support within their populaces.
The divergent and complex positions of EU states thus range from the UK’s fellow non-Eurozone member Sweden, whose political and economic interests are broadly aligned with UK positions, to countries that have more complicated postures. The fact that Spain, is not alone in adopting a tough stance towards Brexit is underlined by France.
Paris has long had a complex, contradictory relationship with London in the context of EU affairs. And the ardently pro-Brussels Macron, who, like Sanchez, believes Brexit to be an act of political vandalism to the continent, has been accused by UK ministers of holding up progress in negotiations since he was elected.
Macron’s Brexit positioning, including his robust stance on future UK access to the single market, is reinforced by broader French plans to pitch Paris as a competing financial centre to London, which had begun in earnest under the presidency of Francois Hollande. This saw former finance minister Michel Sapin and Hollande’s Brexit special envoy Christian Noyer, a former Bank of France governor, begin openly promoting Paris with key financial firms after the June 2016 referendum.
This has continued under Macron and last year he hailed the decision to relocate the European Banking Agency (EBA) to Paris from London as “recognition of France’s attractiveness and European commitment”. French officials hope that the EBA’s relocation will help bring many thousands of UK banking jobs to the French capital, which is competing post-Brexit with other financial centres, including Frankfurt, with many on the continent asserting that London cannot remain as the main euro-denominated financial clearing centre.
Moreover, during last year’s presidential election campaign, Macron also said that he may seek, post-Brexit, to renegotiate the 2003 Le Touquet migration agreement. This allows the UK to operate border controls in France and has kept thousands of migrants on the French side of the English Channel.
Last week, May met Macron, but this session predictably did little to break the substantive impasse between the two in the UK’s EU exit negotiations. This outcome likely reflected the domestic-driven motives for Paris to push for a tough settlement with London. And, in this context, the French president has previously dismissed UK attempts to try to “divide and rule” the EU-27 by picking individual states, thereby weakening the hand of Barnier.
Taken overall, Spain and France underline how the distinctive interests of EU states are adding to the complexity of Brexit negotiations. While Brussels will continue to seek unified EU stances under Barnier’s leadership, London will simultaneously try to shape the positions of nations that could be key allies or foes, even though this is likely to have limited success.
Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.
