TIME: 12:00-13:00, 1st November 2017
VENUE: The Henry Jackson Society, Millbank Tower, 21-24 Millbank, London, SW1P 4QP
SPEAKER: Hans Kundnani, Senior Transatlantic Fellow in the Europe Programme, German Marshall Fund
CHAIR: James Rogers, Director of the Global Britain Programme, The Henry Jackson Society
James Rogers
Good afternoon. It’s just a few minutes past midday and thank you for all coming to this event where I would like to welcome Hans Kundnani, who some of you may know is the Senior Transatlantic Fellow at the German Marshall Fund of the United States and he is also the former research director of the European Council on Foreign Relations. He is an established expert in relation to German and European Union affairs as well as transatlantic relations and German history more broadly. And today he is going to talk to us about what we call the German non-election and how it might influence or shape both Britain’s decision to leave the European Union and the negotiations relating to that and also the European Union in the future as well. So he will basically speak for around 20 minutes and then that will allow for 40 minutes or so for questions and answers because I’m sure many of you have to go back to wherever it is that you came from and enjoy the rest of your afternoon. So without further ado, I will hand it over to Hanz and he will share with you his thoughts on this important matter. Thank you.
Hans Kundnani
Thanks, James. It’s really nice to be here. This is my first time speaking at a Henry Jackson event. You know, we go way back. But anyways, it’s really nice to be here. Thank you all for coming. I’ll try to be quite brief because it’s always more interesting to have discussion, I think, rather a long presentation. Basically, what I’ll do is I will talk a little bit about the election itself and I’ll explain why I call it a “non-election” and then try to talk a bit about the consequences of it for the EU more broadly and then specifically for Brexit. And the short version of this, and it is a bit of a spoiler, is actually not very much is going to change. It’s basically going to be more of the same, apart from in some domestic policy issues, basically in terms of Europe and Brexit really what I’m going to say to you is that actually nothing much is going to change even though we have now (inaudible) probably going to have a different coalition than the one we’ve had over the last four years.
My argument is essentially there’s such a consensus in Germany around Europe in general that actually not very much is going to change and so basically what I’ll do is I’ll talk mainly about that consensus and in particular what I think are the 3 elements of the sort of German consensus on Europe and the implications of that for Brexit. So this was, I think, a sort of, you know it’s slightly provocative, but it was a “non-election” because, you know, it was pretty clear that first of all that Merkel was going to win. There was this brief moment the first two months or so of the year when it looked like Martin Shulz, after he announced that he was going to be the candidate, it looked like he might have a chance of winning. So, you know, there was this tantalizing possibility that Germany might have a real election. In other words, one in which two different parties with different platforms might actually compete with the possibility that one or the other might win. Once around about March or so, it became clear that the Shulz bubble had burst, it was then clear firstly that Merkel would be the chancellor again for a fourth term. It was a foregone conclusion. Secondly, the Social Democrats would come second, so in essence, this was an election for third place. That’s really why I say this was a “non-election.”
On top of that, the platforms of the Christian Democrats and the Social Democrats, as L’espiegel? put it recently in his brilliant story, which I highly recommend if you’re interested reading about the Shulz campaign. L’espiegel had a reporter who spent, he basically spent six months with the Shuz campaign and it’s this incredible inside story. I mean, Shulz comes out if it very very badly. In any case, in his story, L’espiegel says that to see the differences between the Social Democrat agenda and the Christian Democrat agenda, you needed a microscope and I think that’s about right. There were these nuances, but really there wasn’t much to choose between them.
Now I thought once it had become clear that the Shulz bubble had burst and Merkel would become chancellor again, I thought that the message that the message that the German people were going to have sent in the election was they wanted more of the same. By re-electing Merkel, by rejecting the slightly different approach to Europe that Shulz had put forward. He basically put forward, in the beginning of the campaign, it looked as if he might have a radically different position than Merkel, and for the first time really since the beginning of the Euro crisis began in 2010, the Social Democrats might actually offer an alternative approach to her approach to the Euro crisis. But then he backed off of that, and then in any case, as I said, it was pretty clear that he was going to lose. And so, it seemed to me that the message as far as Europe goes from the German election was going to “we want more of the same.”
What actually happened was in a sense that only more so. And what I mean by that is that actually the Christian Democrats actually did very badly, their second worst performance since the creation of the federal republic in 1949. The Social Democrats also did even worse than people were expecting and it was clear that they were going to do very badly, but they did even worse than that. And the two big winners were the Alternative für Deutschland, the Eurosceptic far-right party and the FDP the Free Democrats, the liberals, whose leader Christian Lindner had gone into the election promising an even tougher approach on the Euro than Schäuble’s. In particular, he revived this idea that Schäuble had had in 2015 of kicking Greece out of the Euro. And so the two big winners are the two parties that had called for a tougher approach on the Euro zone. And so, in a sense, as I said, the message that the German people sent in the election on Europe and in particular on Euro zone issues, which I think in the end is the most important thing as far as the future of the EU goes, was not just “we want more of the same,” but “we want an even tougher approach,” actually. So insofar as there will be a difference, I think it’s that. That now actually, particularly because of the presence of the FDP probably in this new so-called Jamaica coalition of Christian Democrats and Free Democrats and Greens. The Free Democrats, none of this is clear yet, but the Free Democrats are quite likely to get the finance ministry. It’s not clear if it will be Christian Linder or (inaudible 18:54), but it will probably be a free Democrat. And so that itself put pressure on the government to pursue a tougher approach on the Eurozone. Having said that, Merkel will still be in charge, and as I said, it’s worth remembering that it’s not as if Schäuble was sweetness and light. So actually, I mean again, I think we’re talking about a difference of nuance here. He’s might be slightly tougher, but he won’t be a huge difference, I think, on these broader Eurozone questions.
So the reason for this, as I said, and this is really what I’ll spend the last sort of 10 minutes or so talking about is this consensus, this broad consensus that exists in the center ground of German politics on Europe that includes all of the four parties that could have been in government. So apart from the three that look like they will be in government now – the Christian Democrats, the Free Democrats, the Greens — obviously is the Social Democrats. Now, you have other parties, the AFD and Die Linke on the left that do offer very different approaches to Europe, but there’s no way they would have been in government anyway. So what, I think, you have is a consensus in the center ground. So whether it would have been another grand coalition of Christian Democrats and Social Democrats or whether it had been a so-called traffic light coalition or a Black-Green coalition, or a coalition, which looks now most likely, a Jamaica coalition, basically I think you’re going to get the same approach to Europe because they basically all agree on Europe.
And so I’ll just identify what I think are the three sort of elements of this consensus and that will bring me to Brexit. And I won’t say too much about the individual parties. I mean (inaudible) there are some slight differences and we can get into that in discussion if you’re particularly interested in the detail of one of the individual parties, but I’ll just talk about what unties them: this consensus. The first of these sort of three elements, as I see it, is a broad commitment to European integration. And by that, I don’t just mean that they’re all in favour of Germany remaining in the EU (inaudible) there’s very few people that believe that Germany would be better off outside of the EU, you know, in some kind of German from of Brexit. But what I also mean is that they think that the solution, not just to the problems of the Euro, but in a way, almost to sort of nearly every problem you can imagine in Germany, they think the solution is more Europe. So, you know, there is this kind of way in which in German political debate, whenever you talk about any issue, there is this kind of reflex to say “Well the solution to that, the way to solve that problem, is to move further in European integration.” So the consensus is not just for not dialling back European integration, preventing disintegration. It’s also that there should be more integration. And the reason I emphasize this is because I think some people both within the German debate, but also outside kind of tend to see the fault line in German politics, I think misleadingly, as being between sort of integration and disintegration or integration and non-integration, more Europe, less Europe, but that’s not really the fault line in German politics, at least as far as the mainstream parties go. The real fault line is between what kind of integration you want. And basically everybody agrees that you have to have more integration. The question is exactly what that would look like. Which areas, but also exactly how that would work. So, for example, in this big debate about a sort of possible deal between Macron and Merkel, again, you know, the tendency is to say well some people in Germany are more in favour of integration, which out them closer to Macron, and other are less so. But that’s not really like that because actually Schäuble who is the sort of least yielding in a way is actually the most in favour of integration in a funny way. So the real question is, I think, what kind of integration we’re talking about and in relation to the Eurozone and this possible deal with France, I think the real question is do you move ahead with integration in the Eurozone that gives Germany greater control or not.
So the version that I would argue Schäuble is in favour of is not simply pro-Europeanism. It’s what I call pro-German Europeanism, which is a kind of integration in which Germany increases its control over, particularly over other member states’ budgets. Schäuble is perfectly happy, in fact, wants to move ahead with deeper integration in the Eurozone, but because he sees that as a way of increasing German control, extending German rules, so that, you know, the French simply have to go along with them, much in the way that, for example, the debt break, which was introduced throughout the Eurozone after the crisis began has sort of increased Germany’s control, and as I said, increased that, expanded the system of German influence rules over which, you know, whoever you elect now in the Eurozone, you have very little capacity to change that. So, the way I think of this, is there’s a kind of a spectrum amongst those who want more Europe with the Greens in a way on one end and the end of that spectrum, which I kind of think of as being more solidarity, more distribution, redistribution, and greater discretion on economic policy. And at the other end, it’s also more Europe, it’s more integration, but its more the sort of competitiveness end of that spectrum. So in a sense the tension, I think, is not between integration/disintegration, more Europe/less Europe. It’s between solidarity and competitiveness. That’s the way I think about the broad kind of debate or fault line in Germany on Europe.
That brings me to the second point which is more directly related to Brexit, which is that there’s a consensus not so much that Britain should be punished. I think this is a bit of a misleading way to think about this. You hear this all the time in the British press. There’s some in Europe that want to punish us and some who are more sort of more kind of consideratory as it were. I don’t think that’s right. I think that the way that the Germans think about it is simply that you can’t, and this is where there is a huge consensus, you can’t do anything that would give incentive to other EU member states to follow the British kind of approach and think about leaving or renegotiating some kind of, what they think of as kind of special, sort of, special position within the EU. And I think, in practice, it does sort of amount to the same thing in terms of the way you actually pursue the strategy. So I think really all I’m disagreeing with is the idea that this is some kind of vindictive approach. That’s not the sort of thinking. The thinking is more, well look, because we absolutely believe that the EU must stay together because Germany has no alternatives and Germany sees itself as having this particular role to hold the EU together now, this is simply the approach we have to follow. We don’t particularly want to punish the Brits, but we have to simply disincentivize other countries from following a similar approach. So as I said, what that mean in practice, I think is, as I said, that roughly the same thing, which is that Britain must face some costs for leaving the EU. It must basically be in a worse position and be seen to be in a worse position after leaving the EU than when it was in the EU.
And I suppose a sort of (inaudible) of that is, again, this sort of consensus that European integration is a kind of a package deal. That you can’t sort of pick and choose which bits of integration you want, even though, and maybe we can get into this more in the discussion, I think the same time is trying to deny, prevent other EU member states including Britain from picking and choosing in that way until obviously it decided to leave anyway. I think the Germans also tried to do the same thing themselves. So, you know, it’s clearly true that there is much more willingness in Germany now to move ahead with integration, say, in terms of security, security policy where Germany actually needs things from other EU member states, particularly France, but it doesn’t want actually to, it wants to limit the amount of further integration in certain other areas where it feels it only has costs. So I think there is a sense in which Germany as much as Britain is trying to have its cake and eat it, as Boris Johnson put it.
And that brings me to the final point, which again, it’s more general, but in a sense it’s very very directly related to the Brexit question, which is about freedom of movement. There is a huge consensus in Germany that freedom of movement is absolute and non-negotiable. So, you know, I don’t live in Berlin anymore. I live in Washington since the last year or so, but I lived in Berlin between 2015 and 2016 at the time of the refugee crisis. I arrived just before the refugee crisis began and I was always amazed when I would have these discussions around freedom of movement with Germans. The sort of, I thought, undifferentiated way in which they thought about this. So the first thing was that, obviously in the context of the refugee crisis, there was the whole question about what you do with Schengen. And I used to have to explain to Germans that Schengen and freedom of movement aren’t the same thing. And that although Britain wasn’t in Schengen, at that time at least it was still, the principle of freedom of movement still applied to Britain. And they would say “Oh yes, I hadn’t really thought about that.” They simply saw this in a very very undifferentiated way – that Schengen and freedom of movement are sort of basically the same thing. So, in other words, the idea of a borderless zone where you don’t have border checks is the same as the idea of, the principle of being able to move from one EU member state to the other. And, you know, they’re very distinct things. You could clearly have one without the other, which is the situation that Britain find itself in.
But then, more broadly since then, the discussions I’ve been having prompted by David Cameron’s attempt to renegotiate freedom of movement and introduce some minimal restrictions on freedom of movement, you come up, I find, against a brick wall in Germany, which is, you know, you just can’t go there. And it’s quite interesting because the way that Germans will put this is sort of in idealistic terms, ideological terms in a way. That this is just something we’re committed to for the sake of it because it’s part of the European project. This is very very fundamental to European integration. And they’ll say that you just don’t understand how the symbolic nature of the idea of, you know, not having broader checks and being able to cross from one EU member state, one Schengen country to another. This is so symbolically important for Europeans, continental Europeans, and you as a Brit simply don’t understand this.
And at a time when there’s this whole debate about the sort of democratic deficit in the EU, and so reconnecting the EU as a project to citizens and making it more popular because they’re conscious that this is a problem with Euroscepticism and not just in Britain but throughout the EU including in Germany. This feels very important to Germans because they feel like this is a very tangible thing that ordinary Germans who don’t really understand the EU, and don’t think about this a lot. This is something they can understand is that they can move, they can drive across the Dutch-German border and there’s no border checks. This is just something that appeals to them in a very concrete way. In the same way as, you know, tariffs, you know, roaming tariffs for mobile phones and the single currency as well, you know, having this currency. They feel like these are very very important ways to reconnect with a sort of ordinary people. And so, they’re really digging their heels in on freedom of movement as something that can’t be renegotiated. And so, you know, when I would then try to say, well but hold on, freedom of movement has evolved over time. It wasn’t always, you know, it doesn’t say in the Treaty of Rome that you have to have the particular way in which freedom of movement is now being interpreted or when I would say, well but hold on, I understand that it’s one of the four freedoms, but they’re also developed in different ways. So it’s not as if all of the four freedoms have been developed to the same extent as freedom of movement. In particular, the Single Market for services has been developed, well, really not very much at all. If it (inaudible) been developed further, it would have helped Britain, I think, actually to make a case for staying in the EU. But these arguments, I think, it’s quite difficult to make these arguments in Germany because, as I said, there’s broad consensus that freedom of movement is just a good thing.
Now I happen to think that, and this is basically where I’m, going to end, that actually behind these sort of idealistic arguments about why freedom of movement is so important, I think there actually is some slightly more self-interested reasons why Germans are so attached, particularly the political class, is so attached to freedom of movement in general and to Schengen in particular, which has to deal with the interests of the German economy, actually. The way that, since the end of the Cold War, the German manufacturing industry has integrated with particularly the economies of Central and Eastern Europe. It was already to a large extent integrated with those west of it, but the way that it’s now also become so integrated with Central and Eastern European economies, so that you have these manufacturing supply chains that cross borders. There’s such a fear that actually, if you were to even introduce border checks, if you were to in some way to suspend or end or reform Schengen and have border checks, let alone if you were to actually limit freedom of movement in some broader way, so that you couldn’t have, it would sort of be harder for people to work in other EU member states. I think there’s just such a fear about what this would mean for the German economic model. And, as I said, I’ll basically end there, but I think though that this is very illustrative of a broader German approach to Europe. It’s a little bit cynical of me, but I think that often Germs couch actually hard interests, often economic interests, in these idealistic pro-European terms. And they’ve been doing it for so long that they simply actually can’t see anymore that actually what’s happening here is they’re pursing their own particular interests, but making the case for it in the name of Europe.
James Rogers
Ok, thank you for that. That was a very succinct and packaged overview of the situation. Now we have an opportunity for the next 35 minutes or so for debate. So if you would give your name and affiliation, if you have one, beforehand, that would help us as well. So, yes please.
(Inaudible name, international China strategist based in Hong Kong)
Well, first of all, thank you very much indeed. My name’s (inaudible), international China strategist based in Hong Kong. You mentioned the consensus in Germany of more Europe, more integration, but that consensus has got to contend with two realities on the ground. First is the kind of anti-immigration backlash and that informs most of European member states. The second is the realization after the last Euro crisis that there are differences in the economies, in the economic policies, fiscal policies, and you just can’t have a one size fits all directive from the European Union center. So, with these two dynamics – the anti-immigration backlash and the realization there are different levels of economic development – translate into the feeling that in order to hold the member states together, it’s better to have a two track Europe. In other words, a kind of two different levels of membership with different applications and different (inaudible) and, if so, would it impact on the Brexit (inaudible) negotiations. (35:35)
Hans Kundnani
Yeah, should I answer them individually or do you want me to take a bunch.
James Rogers
Yeah, let’s go individually.
Hans Kundnani
Yeah, ok. Yes, I mean I sort of broadly agree with the two realities that you described. And on the anti-immigration backlash — I should perhaps maybe have said this – that I think actually there is the possibility of some movement. It could be that over the next four years, partly because the AFD has done so well, that Merkel and her government could be a little bit more sympathetic to some ideas about how you would limit freedom of movement, particularly in terms of access to benefits, I would guess. So the thing is, I don’t think this really helps Britain very much because, you know, we’re now sort of negotiating Brexit. So, you know, if Cameron were having his negotiation now, actually it is possible that he could get more than he could have got then. Also because Macron has been moving in a somewhat similar direction with trying to reform the Posted Workers Directive. So that actually is an area in which there could have been – I mean this is the tragedy, I think, in a way, of Brexit is that this is all now too late – but there could have been some movement there. Now, on your point about the idea that the solution to this is a two track Europe, as you put it, I think that’s a bit too easy. I’m a little bit sceptical of this idea of a two-tier or a multi-tier Europe. It sounds great in practice and it’s very tempting from a British point of view to think that this would help Britain sort of find a place in a kind of altered tier. But when, I think, you look at the detail, I find it quite difficult to see how this would work. In particular, it’s not clear to me what you do with the Euro. I still think – I have for the last seven years – that that’s the question. You know, ultimately the future of the EU depends, I think, on the Euro and how you solve the problems of the Euro. To a lesser extent, the refugee crisis and the question of Schengen, freedom of movement, but I don’t really know how a two-tier Europe helps you solve the problem of the Euro. Because the fault lines within the Euro, I mean, the main fault lines in Europe, it seems to me, basically cut right through the Eurozone. So, you know, in very very rough terms, you know, the big fault line on the Eurozone is this sort of North/South kind of fault line an then on these questions around, you know, freedom of movement, and immigration, and refugees, and so on, it’s basically an East/West fault line. I mean, this is very very broad brush because they’re exceptions. You know, Ireland is, you know, not in the South. So, in other words, it’s not easy for me to see who would be in which tier. So, for example, what do you do with France and Italy? There’s no way in which they could not be in the core of Europe. And so, these problems then still remain even within the core. The fault lines will exist within the core. So you could have a situation, I suppose, where some countries like Poland and Sweden and so on, which don’t want to join the Euro, at least not for the foreseeable future, negotiate some kind of looser arrangement. I mean, that was one of my hopes before the Brexit vote, that you could have some kind of reform of Europe that would allow Britain to sort of find a place in some kind of second or third tier of the EU. Even then, I think that would have been difficult.
(Inaudible name, international China strategist based in Hong Kong)
But at least for countries like Greece, for example, were just clearly in a different category of (inaudible) all together.
Hans Kundnani
Well yes, but see Greece, I just think, see in many ways Greece is a distraction, I think, because the future of the Euro – this is the bizarre thing, I think, about the way the Euro crisis is being handled. Is what was a crisis in a, you know, one particular country that was particularly fiscally irresponsible, but represented 2% of the GDP of the Eurozone, has been turned into an existential crisis for the whole of the EU. So I suppose I would say forget Greece. I mean, the real problem is can the Eurozone work for France and Italy? That to me is the question and I just don’t see how the idea of a two or three tier Europe solves that problem. And by the way, the other reason I’m sceptical is that it seems to me that actually the momentum in many ways is in the opposite direction now. As I said, you know, during the run up to the Brexit referendum, I think there was this possibility, if Britain had voted to remain, there was a possibility of thinking about some kind of multi-tier Europe that could work. But now that Britain is on the way out, even if Britain doesn’t end up leaving, I think the debate has now moved on. And my reading of the mood in Berlin is that one of the opportunities created by Brexit is to make the EU more homogenous, not less homogenous. So, in other words, now there are, you know, the only countries, very few countries outside of the Euro, only one, Denmark, has an actual opt-out, and the expectation, I think, in Berlin now is that now basically the Euro is the currency of the EU now that the Brits are out and basically everyone is going to join. And I think the pressure will increase on those countries to join, and if they don’t, I think they’re now going to be more marginalized than they would have been before when you had Britain, sort of, to some extent, with some overlapping interests with them. So I see the momentum in the opposite direction.
And this brings me back as well to the question of the legitimacy of the EU and the democratic deficit because Germans, you’ll hear Germans say a lot that part of the reason why EU citizens, including citizens in Germany, can’t relate to the EU and don’t feel that it’s legitimate is because it’s so complicated. And there are already all these different layers and tiers and, you know, if you look at a sort of a diagram that shows who is in what structure, you know, whose in Schengen, who is in the Eurozone. I mean, it’s so complicated already, so I think the German impulse is to say, not least for reasons of legitimacy, we need to make this thing simpler. You’re either you’re in or you’re out. So, I see the momentum moving in a different direction.
James Rogers
Yes.
Guy Thomas
I actually agree with what you said, which actually I think the European Union
James Rogers
Can you give your name and affiliation?
Guy Thomas
Guy Thomas. I have no affiliations. Basically, the European Union wants to become very centralized to give them a chance at making the single currency work. A lot of British people have, lots of British people I’ve met, British people now have accepted single currency, with good reason I have to say. What Britain needs, the idea (inaudible) outer zone for Britain wouldn’t really work because, with Germany’s inability to compromise on freedom of movement. I understand where they’re coming from in terms of integration, the economic benefit, but in reality freedom of movement has created social and economic issues in this country. I think everybody has to accept that. My big fear is this. What type of agreement can, trade and cooperation partnerships Britain can have post-Brexit. And how flexible can both sides be? Obviously Theresa May’s got her red lines. European Union’s got her redlines, which might vary from country to country, and that could get very interesting, potentially. How can Britain engage in Europe without accepting (inaudible) because we are part of the political Europe, without being in the EA with Britain (inaudible) orphan state.
Hans Kundnani
Yes. Well you just basically sort of asked the Brexit question, right? I mean, what kind of relationship should we have? Is it hard Brexit, is it soft Brexit, is it something else. I don’t have the answer to that. Either what it should be, you know, I voted to remain, for what it’s worth. But I can see the arguments for leaving. I’m sort of probably on the Eurosceptic end of the remain side. Obviously the hard Brexit, has potentially, at least in the short term, huge economic costs, but as I think you’re suggesting, a soft Brexit doesn’t really solve the problem of freedom of movement. So, I mean, I don’t have a simple answer to that. Maybe James does.
James Rogers
Well actually, I could maybe chip in here and ask you a question as well. It (inaudible) on what you just asked yourself. And that is I had this kind of idea that if we look at the situation now, it seems to me that we have a situation whereby both Germany in particular, the UK, Russia, America. Those are the four major, what Brendan Simms, for example, (inaudible) would call the four main ordering powers in Europe. They’re the four big powers that have the ability to completely fundamentally change things if they have the will to do so. So, it might be that for the past, let’s say, 70 years in the context of the Western powers, Germany, Britain, the US, that there has been a broad marriage of interests. And particularly, I would say of “interests” and we often get these confused with values and all of the things that you are talking about. This kind of idealistic movement towards European integration. But if we assume that Brexit and to some extent what’s happening in the US, not only domestically, but also in relation to the US’ growing focus on East Asia. In particular in relation to the right of China and Japan’s responses and so on and so forth. That we’re actually in a position now, and increasingly so, where there will be an increasing, let’s say, unmarriage or divorce of interests. And what serves Germany, and what serves Britain, and what serves the U.S., and, to some extent also what serves Russia is going to become very different in the future. And it’s simply because both Britain, Germany, and the US have had this broad marriage of interests that they’ve been able to get the upper hand in relation to Russia recently. But the situation may now be changing. And this opens up the question to some extent (inaudible) on what you’re asking and also to some extent the future in relation to Brexit. Germany seems to have a very distinct understanding of how it wants Europe to be ordered. And we might say that this is animated by some kind of idealistic idea about where Europe should head. We might say also it’s animated to some extent about where Germany’s hard economic interests lie. There may also be some degree of overlap and both groups might be working for it simultaneously. But if Britain has now a very different understanding, and insofar as it’s no longer going to be inside the European Union, assuming that it actually ends up leaving, then Britain will be in a very awkward position that it doesn’t actually have at the moment an understanding of how it wants Europe to be ordered. And in that case, there’s a lot of work to be done, I think, in the UK, to determine how we want Europe to look. And this might actually clash fundamentally with Germany and it might also fundamentally clash with the other two powers as well. So, what do we want Europe to look like and how might this disrupt the status quo, and indeed, how can we potentially mitigate there being fallout to this situation because, in time, if Brexit does occur, irrespective of all the polarization that we’re seeing at the moment, irrespective of all the discussion that we’re seeing at the moment, this would all move into history and it will become, in time, I think, there will be an upper hand that is gained, maybe not by those that wish to leave, but by a new kind of consensus in the UK as to where we should be moving to in relation to our own neighbourhood and how will this conflict with those that have already accepted another order that has been established over the past 60 or 70 years?
Hans Kundnani
Yeah. I think agree with all that. Although, I have to say, I find marriage and divorce metaphors in international relations unhelpful. So, I wish people would stop talking about a divorce. Because I don’t think it is a divorce because we were never married. And states aren’t individuals. And so, I do wonder, it’s not just in the Brexit debate, but there are so many of these sort of kind of relationship kind of metaphors about sort of human, particularly sexual, relationships. And I just think this is probably not the right was to think about it. Not least, because divorces do get acrimonious and, you know, if we do want to prevent this getting acrimonious, I think one way to do that is to not think about it as a divorce. To think about it as a much more rational kind of choice that Britain is making to leave a particular international organization. It’s not we’re leaving our wife or husband. But apart from that, I think I agree with you.
So, sort of another thought on this is that, because it comes back to something else I was saying, I do think that Trump is a game changer here both in terms of the EU’s future in general and the relationship with Britain. But I’m not sure I kind of fully kind of understand how. But it seems to me it must be a game changer because what I think it’s done is introduced the security issue in a completely different way than before his election. So if you look at the EU, I think actually in both cases that the EU in general and Britain’s relationship with the EU, actually it’s an incredible opportunity, but it seems to me as if this opportunity is being missed, so this becomes quite tragic. So in the EU’s case, I think it was an opportunity because suddenly it seems to me, almost overnight after the election of Trump, and this is basically because of the uncertainty that he’d introduced about the US’ commitment to its allies in Article 5. So, you know, in other words, about the security guarantee. As a consequence of that, there’s now radical uncertainty about the security guarantee, it seems to me, that’s not going to go away. So, overnight, what happened after the election, it seems to me, was that France suddenly became more powerful than it was before. And it was interesting that you didn’t mention France as one of your four powers. And I think that before the election of Trump, I would have agreed with you. But now it seems to me suddenly France is much much more powerful than it was before. It is the one European nuclear power apart from Britain, which is obviously on the way out. Germany actually correspondingly overnight became much weaker.
Now, this is an opportunity because it seems to me that it created the possibility of a sort of grand bargain between Germany and France in a completely new way; however, neither side is taking that opportunity. It might still happen, but it seems to me that some kind of a grand bargain where France essentially says, “Well look, you know, we are going to take a greater role essentially now, given this uncertainty about the US commitment, we are going to take a greater role in guaranteeing Europe’s security, in particular Germany’s, but in exchange for that, we clearly need some concessions from Germany on the economic side. That seems to me a tremendous opportunity, but I don’t see any indication that either side is going to take it. Then in terms of the EU’s relationship. Sorry , the UK’s relationship with the EU, it seems to me there’s also an opportunity because suddenly, it seems to me, that the UK and the EU need each other in a way that they didn’t before for exactly these reasons, for security reasons. But again, I don’t see any sense, this doesn’t seem to have been injected into the Brexit negotiations by either side. It’s so overwhelmingly, it seems to me, in the interests of both sides to reach some kind of cooperative, to reach an agreement that creates a cooperative relationship where Britain can use its military resources to help guarantee the security of the EU, obviously against the background of a threat from Russia, but as I said, it doesn’t seem to be introduced into the negotiations in a helpful way. Insofar as it does come in, it’s perceived as a being a sort of threat by the Brits. That, you know, if we don’t get some concessions on trade, we’re going to withdraw our troops from Estonia or something. Instead of seeing this in a much more positive way, which I think is how it should be seen. Do you agree with that?
James Rogers
Yeah, I think I do. I don’t understand why this hasn’t been thought of more aggressively by the British side and also understood more thoroughly by, what I would say, the European side. I mean, if you look at the hard figures, we have done calculations here. We have a report that will be out in due time looking at what the European Union, you might say, owes the UK. So if you look at hard defence spending or security spending, the UK is spending significantly more than it otherwise should if we take the sort of 2% of GDP benchmark and the aid spending and the intelligence spending. Whereas a country like Germany has basically short changed, you might say, the Atlantic alliance by something of the region of 250 billion dollars in the past 5 years alone. And then you look at France, which is also not spending 2% and all the others. And you end up, if you look at the last 5 years, basically the Europeans have underfunded NATO by (inaudible) of something like a trillion US dollars, which is not a small amount of money. And this money has been used for internal purposes, whereas the UK has coughed up the money and more. So, there’s only really one country other than the United States that can actually do this kind of thing and that is the UK. It is the only country that pledges to use its nuclear weapons in defence of NATO, unlike France. And it’s the only country that has kept up a high degree of defence spending other than countries like Estonia and Poland, but they’re in a much different position. So I’m not sure why this hasn’t been used much more aggressively to say look, “We can actually continue to underpin European security if the United States withdraws or if the United States becomes less interested even because of domestic polarization or because of interests in other areas of the world.” But this (inaudible) back to this idea of an ordering principle, and many British elites or British thinkers are still mesmerized by the European idea and they haven’t yet come to the terms with the fact that it’s going to fundamentally change in time and how it should change to the better. But anyway, that’s enough from me. We can ask a few more questions. Yes, you sir.
Mike Caddon
Thanks. My name is Mike Caddon, no affiliation. Can I just take you back to German domestic politics?
Hans Kundnani
Yeah, yeah.
Mike Caddon
Because what we’ve seen over the last dozen years or so is two grand coalitions have moved the CDU significantly to the centre. That’s opening up space on the right of German politics as we see not only with the AFD, but also the tension between the CSU and the CDU. Nailing down this Jamaica coalition is going to be very difficult. And we’re also approaching the end of Merkel’s term as chancellor. Personally, I don’t think she’ll stand again. So, at some point, there’s going to be a new chancellor. So, can you say a little bit about the thinking within the CDU? Strategically, how worried are they by the right flank, if you like, and how easy or difficult will it be for them to try to take back into the fold a lot of those voters who went this time for the AFD.
Hans Kundnani
That’s a great question and I basically agree with the way you’ve, with basically everything you’ve said, with the way you framed it. I think those are exactly the dilemmas. I’m actually just in the process of finishing off a piece, which is trying to argue that the AFD is good for German democracy, which is going to make me even more unpopular in Germany than I already am. But I think you’re exactly right. That what’s happened is there’s been this convergence in the centre ground of German politics, which is part of the reason why the AFD has been merged. I mean, even its name the “Alternative for Germany” is a response to Merkel’s statement that there is no alternative. You know, originally, to her approach to the Euro crisis, but more broadly, this kind of approach, you know, there’s just no alternative to this kind of centrist kind of approach to politics.
I also agree that the Jamaica negotiations are going to be very tough and, you know, literally from the morning after the election, I was saying that I’m not sure that this is, you know, it’s probably going to happen because they want it so badly, but it’s not a foregone conclusion by any means. There’s no precedent for this at the national level. Only, you know, even at the state level, only a few small states have tried this Jamaica permutation, and so it’s not clear to me that it will happen. If I had to bet, let’s say, it will, but it’s not a foregone conclusion by any means. It does seem as if the Greens have kind of, I mean, amazingly to me, completely folded on the Eurozone. (Inaudible) distinctive approach to Europe. As I’ve said, they’re on one end of the spectrum of this consensus that I’m talking about. The sort of solidarity end. But they’ve completely given up on the idea of trying to, in some way, balance out the FDP on the Eurozone. They’ve basically just sad we’re going to give up on that and focus instead on other issues which they think are more likely to sort of satisfy their base, so environmental policies, and social policies, and so on.
Your real question though was about what the strategic thinking is in the CDU, and I don’t think I have a good answer to that. I’m not sure that there is much, actually. As I’ve said, I don’t live in Berlin anymore, so I don’t talk to Christian Democrats about this stuff as much as I used to. And I think the party is just very divided. You know, you said it yourself, you know, the CSU clearly thinks that basically the CDU needs to move to the right, especially on these questions around culture, and identity, and immigration. And although the refugee crisis is basically over, there is a huge challenge, I think, of integrating the million or so asylum seekers that came in 2015, 2016. The CSU thinks that it needs to move to the right precisely to kind of see off the AFD and then there’s the sort of faction around Merkel that, you know, thinks that actually the centre ground is the place to be. And, you know, it’s clearly true that, I mean, it’s remarkable to me how so any people on the left – Social Democrats, Greens as well – since the refugee crisis began, just love Merkel so much. So she has been quite clever in terms of, sort of, pulling voters off from the left. But a lot of that is, as you were suggesting I think, connected to her personally. So it’s not clear what happens to the CDU, this is the big question, what happens to the CDU after Merkel. There aren’t many obvious candidates to succeed her. Famously, she sort of killed off all of the competition, which is why someone like Jens Spahn, you know, who is sort of 40, or thinking maybe even younger than that, and is sort of Schäuble’s protégé, is now being talked about, you know, has been for the past year or so, as being possible successor. He’s incredibly young and inexperienced because the generation above him, you know, the generation between him and Merkel, it’s hard to see apart from (inaudible), who is extremely unpopular within the Christian Democrat party. It’s hard to see who, you know, who sort of who could succeed her. So I don’t have a good answer to that. I think they’re probably, you know, they’re debating it. The success of the AFD has been a shock to them even though, you know, you could see it coming. And, you know, certainly the result in the election, they did a little better than people were expecting, but it was, you know, just 1% above the upper level of the projections, so it wasn’t a huge surprise. But, I think, despite the polls which had been showing, you know, for a long time that this was going to happen, there’s just a lot of denial in Germany about its vulnerability to a party like that. There was, I think, for a long time just an assumption that Germany’s somehow immune from this. The slight, you know, schadenfreude, you know, a German word, about the sort of rise of populism elsewhere in Europe was quite striking to me. There was this sense that this won’t happen in Germany because the Nazi past sort of immunizes us against this and we’re just a much more sensible country than the rest of Europe. And obviously that illusion has now been shattered. How the CDU responds to that, I think they haven’t yet figured that out. So I’m afraid I don’t have a good answer for you.
James Rogers
Okay, let’s take two questions at a time. The gentleman in the back.
Malerie (inaudible)
Malerie (inaudible) if you know what that means. A small sort of bottom-line (inaudible) question is what was the fashion of voting amongst the ethnic minorities in Germany on their election. The much more macro question quite apart from that is might there be a Japanese perspective (inaudible) come into play if and when Japan decides to (inaudible) a more effective military force, will question marks begin to hover over Central Europe?
Hans Kundnani
Over Central Europe?
Malerie (inaudible)
They do it, we can do it.
Hans Kundnani
Oh, I see. If the Japanese start to dramatically increase defence spending, you mean. Ok.
James Rogers
And, yes.
Audience Member
(Inaudible) also a domestic question. Lawrence Taylor from BDA. You commented that Angela Merkel has been quite successful at taking parties from the left parties, so the left and the Social Democrats, both of whom did pretty poorly in the elections. Whereas the two right parties you mentioned – the FDP and the AFD — did well. Does the left more broadly have much of a future in Germany and, if so, how are they going to, sort of, take that ground.
Hans Kundnani
Great question. So, Malerie, ethnic minorities. The short answer is I don’t know. Partly because there’s actually not much data in Germany about anything to do with ethnic minorities because, as in France, there’s a resistance to collecting this kind of data because it’s seen itself as being a racist thing to do. So there’s not much data, but just anecdotally. The picture is a little, my impression is, the picture is a little bit more complicated than you might imagine. And, in particular, it’s quite striking how, you know, the Turkish, you know, the population in Germany of Turkish origin was generally sort of thought to gravitate towards the Social Democrats and the Greens. And, you know, that’s broadly true. But it’s a little bit more complicated because, you know, and this is similar as a position elsewhere. Partly because, you know, many Germans of Turkish origin sort of identify with sort of social conservatism and, therefore, sort of tend to gravitate, actually, towards the Christian Democrats. But also, it’s a very entrepreneurial population, so in some ways, they, the Christian Democrats and the FDP are sort of party of business. Small business in particular sort of appeals to them. And then, the additional thing that makes this quite interesting is that, you know, you have now, since the refugee crisis, some tension between the sort of — and again, this is not unusual – between the sort of existing settled ethic minority population and the new arrivals. And this fear that the sort of next wave of immigrants kind of undermines the sort of status of the settled immigrants. So it’s not unheard of, and as I’ve said, but this is just anecdotal. I don’t have data on this. Some Turks work for the AFD. It’s quite interesting. I think basically for these reasons. You know, we are hardworking Turks and we don’t like these kind of Syrians. There’s a very interesting character. The AFD, I think, is a quite fascinating party in all kinds of ways. And it’s, you know, it tends to be described in Germany, I think, in rather simplistic ways. But actually, when you look at it in more detail, I think it turns out to be much more complex. Partly because it was just only created a few years ago, so it’s very much in flux. You know, people are getting kicked out and new people are coming in, and sort of all these, it’s an odd mixture of people like the Greens were when they first emerged in the late 70s and early 80s. Anyhow, so you have these interesting characters in the Greens. Just one example, there’s a guy, he’s the head of the AFD in (inaudible). I mean, his name is (inaudible), so he has a Turkish last name. So when I first saw this, I went well that’s interesting. There’s a person of Turkish origin at least who is a leading figure in the AFD. Turns out to be even more interesting because he’s not Turkish or of Turkish origin. He’s White German. But he married a Turkish woman and took her last name. Which is something that occasionally German men do. I don’t know any other country where this happens that you get married, you take your wife’s name as a sort of statement, as a sort of feminist statement, I guess. But for a leading figure in the AFD to not just take his wife’s name, which is something you generally associate, you know, with Greens or people on the left, but also to take the name of a Turkish, his Turkish, you know, a Turkish name, is quite striking. And so anyway, that’s a sort of illustration of the same point.
The Japanese scenario. I think I would think of it the other way around. I am not an expert on Japan, but from what I know, the limited amount that I know, Germany is actually ahead of Japan in this respect. If you look at defence spending, for example, you know, Germany is criticized for having spent, you know, 1.1, well it’s been declining over the last, you know, 10 years or so from about 1.3 to now under 1.2. And obviously, that’s in the context of the NATO commitment to spend 2%. The Japanese spend 1% as far as I know, 1.0%. And my impression is that the Japanese debate, if you want to think of it this way, is sort of behind the German debate. Right, so the resistance is even greater to any kind of, you know, military action, increase in defence spending, expanding the role of the Japanese military. So, in a way, it seems to me that there’s a very interesting debate, as you’re all hinting, going on at the moment. There is a shift taking place. But actually, the things that the Japanese are debating, if there is an analogy with Germany, it’s the kind of things that Germany was already doing in the 1990s, I think. You know, taking a greater role in terms of, you know, sort of slightly more robust peace keeping operations and so on. But the idea of combat missions apart from in self-defence. Although, I suppose the Japanese were in Iraq, so it might me a little bit more complicated. In any case, I suppose I would resist the idea that somehow the Germans might show, sorry, the Japanese might show the Germans the way. I think it’s, if anything, (inaudible) the other way around. One interesting thing, I think, about the comparison between Germany and Japan is that, and in a sense this is to me an illustration of German hypocrisy, but you could read it the other way around. Which is that even during the sort of immediate 40 year period after the end of World War II, when Germany renounced, you know, Germany and Japan had both renounced the use of military force, and you know, only foresaw the possibility of using the military in self-defence. Germany continued to have, you know, a world beating arms export industry and sold weapons, you know, famously tanks, you know, Leopard 2 Panzers around the world. The Japanese, in that sense, it seems to me, are much more thoroughgoing because they said not only are we not going to deploy military at full force ourselves, but we are also not going to manufacture and export weapons. The Germans sort of, as I said, are slightly hypocritical because they love to think of themselves as a (inaudible), a force of peace, but this is the, you know, the world’s third largest arms exporter. And this is not a new phenomenon. This has been the case for the entire, you know, period after World War II. And often, it’s the same companies, you know, as pre-1945. You know, there’s incredible continuity in the German arms industry. Footnote. Long footnote. Sorry.
Lawrence. The left. The future of the left. Yeah, that’s a great question. Really big question, I think it’s also a question everywhere else. You know, so in this sense, I think the dilemma the Social Democrats have is, you know, it’s perhaps quite extreme, but I think it’s pretty much the same as the dilemma for the left almost everywhere. Which is, you know, that centre left parties have moved to the centre, you know, Britain obviously as well, since, you know, the sort of 80s, 90s. And the question now is do you move back to the left as Corbyn is doing, apparently quite successfully in intellectual terms, or do you continue to sort of occupy that centre ground. And then even if you do move to the left, do you do it on economic questions, which Shulz kind of hinted at, you know, in the beginning of the campaign, that he would do. So he laid into, you know, for the first time, quite extraordinarily laid into Schröder’s, you know, the structural reforms that took place under Schröder. That’s one strategy to say look, the clever thing to do is move to the left on economic policy or do you do it on these questions around culture and immigration and so on, which would be another approach. So I think that’s probably a whole, a subject for a whole separate discussion, the future of the left. And I’m thinking about it a lot. But I don’t have any, I don’t think really anyone has any simple answers on this. But I suppose my answer to your question would be the left is in exactly the same dilemma, the centre left is in exactly the same dilemma in Germany as elsewhere. One final thought there is that for a long time there was this situation until this election. There was a particular German piece of this, which was that, you know, since Schröder, what happened was, you know, the Die Linke, this left wing party emerged. You know, led initially by Oskar Lafontaine who’d been (inaudible) Schröder’s cabinet at the beginning. And so, it split the left. And because the left have this, still had, the left party still had this link to the old German, you know, East German Communist Party, the SPD couldn’t sort of wrap its head around the idea of being in a coalition with them. However, there was a sort of structural centre left majority in German politics. If you put the number of seats that the Social Democrats and Die Linke and the Greens had together, they actually had a majority in the Bundestag. And so, if you could overcome this issue with Die Linke, they would be in the position to form a government. That’s now changed since this election. They no longer have that majority. So even if, you know, they overcome that issue, they still wouldn’t be able to have a majority in the Bundestag. So that’s quite an important change. So basically, you know, things are pretty bad, but now they’ve got even worse.
James Rogers
Ok, well, I know it’s now 13:00 and some of you might need to go. So feel free to leave if you have to rush off for lunch or to go back to work or whatever it is. But I think there’s a couple more questions that we have time to take. So yes, you first and then.
Hans Kundnani
Sorry, I’m giving, my answers are too long. I apologize.
Audience Member
My name is (inaudible). I’m here privately. You said, I think correctly, that Brexit means a weakening of Germany within the EU. Is there a potential move of Germany towards Eastern Europe? You mentioned Russia earlier, but just towards the neighbouring parts of Eastern Europe because I think there’s quite a lot of attitudinal difference there that feeds into some of the choices that Germany would prefer to make. For example, not only Schäuble, but also Merkel had said once upon a time that Greece should leave the Eurozone. Linder, I think, is pretty close to having said that or willing to say that.
Hans Kundnani
He has said that. Absolutely, he’s said that.
Audience Member
So is there an opportunity to make up ground in Eastern Europe?
Hans Kundnani
It’s a great question, another great question.
Audience Member
You talked about the commitment of the, just about the entire German political establishment to ever closer union. Surely the end point of ever closer union is something analogous to the United States. Is that what they’re after?
Hans Kundnani
Okay, two great questions. So first of all, on Eastern Europe. So my, sort of, if you look back over the last 7 years, you know, sort of follow Germany quite closely. One way of telling the story, I think, of what’s happened in the last 7 years is that Germany is constantly looking for new partners and is constantly disappointed by them. So, you know, what happens in the context of the Euro crisis is, you know, obviously there’s this historic Franco-German relationship. Since the Euro crisis, the Germans have just been perpetually disappointed with the French. And, you know, the contempt that you hear in Berlin for the French I find absolutely extraordinary – things that you hear in private about the French. And in that context, you know, a few years ago, sort of around about 2012, 2013, there was this sort of, think kind of what you’re describing, this sort of shift eastwards, particularly towards Poland. I can remember some, two former colleagues of mine at European Council on Foreign Relations wrote this piece called “Poland is the New France for Germany.” This idea that sort of somehow, you know, that can be our new special relationship, not that we’re going to give up the relationship with France. But also, we can use the relationship with Poland to put pressure on the French to do structural reform, you know, because the Poles and these Eastern Europeans, they know how to do austerity and they kind of just get on with it. And, you know, so they could sort of teach the French how to do this. So, in other words, this sort of idea that the East is a model for the South.
Looking back now, I mean it’s extraordinary. It’s only like three years or so ago and, you know, the idea that Poland now could replace France as Germany’s closest partner, or even be sort of an equivalent partner to France. I mean, because now the Germans are just completely disappointed with the Poles. You know, it’s apparently turning towards a liberal democracy and rejecting the European projects as far as they can see. And so, you know, now Germany’s looking around for new partners. So I suppose my short answer to your question is I just don’t see, you know, you have Poland, you have Hungary, you know, these are real problems for Germany now as much as France. So the idea that there’s some easy sort of shift eastwards, I just don’t see it. I mean, one of the biggest dilemmas for Germany now is how to deal with Poland in Hungary in the context of the EU. So that seems to me very very difficult.
United States of Europe. I think the Germans don’t know if they want the United States of Europe or not. And you know, having talked about this consensus, there are, this is where I think there are some differences, right. I mean so there is a consensus that you need more Europe, but whether you actually go all the way to the United States of Europe, which traditionally Germany wanted. I mean, traditionally Germany was in a sense committed to abandoning the nation state and didn’t really understand why other countries didn’t want to give up this terrible thing called the “nation state.” So it’s clearly, you know, (inaudible) and we should just give it up and become European. And I think, for many Germans, this is a way of escaping Germany’s past and escaping their own German identity. They don’t want to be Germans. They wanted to be Europeans. You know, Helmut Kohl famously said this. You know, there’s this famous hilarious story about his meeting with Thatcher. Do you know the story about how he sort of, Cole shows her around the cathedral, the Speyer, you know, and talks about the Holy Roman Empire and just keeps trying to explain to her that, you know, he’s not German, he’s European. And then Charles Powell, her former private secretary tells this story about how after, you know, a weekend with Kohl with all this kind of European stuff, they get on the plane, she kicks off her shoes, and says, “Charles, that man is so German.” Yeah, so there’s a way in which this kind of Europeaness was itself very very German, but I think that is now changing.
So there are now more voices in Germany who, in a sense, have become more British in that respect. They see, you know, they don’t want a United States of Europe. Not least because a United States of Europe would be what they fear in many ways, which is a transfer union, which is this kind of redistributive EU in which the fiscally responsible endlessly subsidize the fiscally responsive, the fiscally, sorry, the fiscally responsible subsidize the fiscally irresponsible. So Germany subsidizes Greece basically. You know, debt neutralization. So I think debt neutralization has put them off a United States of Europe. But, it’s still kind of a complicated picture because, again, I think this is sort of where they want to have their cake and eat it because they still talk about ever closer union, but it’s sort of shot through with kind of contradictions, I think. So another example would be a European army, which is something you hear a lot of rhetoric about in Germany. And again, there is sort of a consensus among the four parties I’m talking about that there should be a European army eventually. But the idea that you would send German soldiers into combat without the Bundestag, you know, approving this. I mean, nobody would have that. So, you know, in a sense, there’s no European army if, you know, each country could veto its deployment. So, as I said, I think it’s kind of contradictory basically.
James Rogers
So what you’re saying then is Germany wants a European Union where Germany is the empire state and Germany calls the shots.
Hans Kundnani
I think there is this, I wouldn’t say that’s the consensus view, but I think there is this tendency. And I think Schäuble embodies it. As I said, which is, it’s not pro-Europeanism, it’s pro-German Europeanism, which is yes, we’re happy to have a political union. We’re happy to go all the way to sort of a, you know, as I said, in a way still this idea of abandoning the nation state, abolishing Germany and, you know, merging it into a political union called Europe. But the condition for that is that it has to be basically a German Europe. In other words, that it has to be so, it has to be defined in such a way that German preferences are embedded in the Constitution as it were of that political union, that United States of Europe, that it’s just a bigger version of Germany, basically. So, you know, an economic policy, you would have basically, you know, something like the German economic system. You have ultra independent Bundesbank, focus on price inflation. I mean to a large extent, this is what the UCB is. But, you know, across the board that you would have German preferences kind of constitutionalized in that way. I think that’s the kind of, you know, Europe that Germany would be prepared to (inaudible).
Audience Member
They should actually welcome Brexit, perhaps as a good neighbour.
Hans Kundnani
You could make that argument, yeah. But then yeah, there clearly is some downsides to Germany as well. You know, the obvious ones in terms of contributions to the budget and the way that Germans, you know, feel that there are certain preferences that they have that the British, so, you know, there’s a sense that also the, yes, that in a sense Germany becomes weaker internally within the EU with the departure of Britain. So, as I said, it’s kind of contradictory.
James Rogers
Ok, well, I think that’s the end of the questions and I hope you’ve enjoyed this short, but very very intense session. And I hope it’s been illuminating. We’ll have some more on other countries as well in Europe and globally in due course. So thank you for coming and thank you to Hans for sharing his thoughts with us.