Merkel might be going, but the common rulebook would still mean Berlin writing our rules

If you ask any cabbie who’s running the EU they are bound to mention Angela Merkel – at least for now. But if you asked anyone in the Foreign Office, it’s likely they would go through unheard of names like Antonio Tajani or Mário Centeno before they’d get to the German Chancellor. Even then, squeamish officials are likely to mention her as part of the wider group of EU leaders, without singling her out.

Germany’s formal position under the European treaties might be no different to other member states – in theory the European Commission makes proposals and the Council and EU Parliament make the decisions – but as the UK’s former ambassador to Germany, Sir Paul Lever, mentions in his recent book, it’s Germany’s view which is sought by the Commission before it acts, and other governments make sure they know what Berlin wants before they decide on a course of action.

The extent to which German decisions dominate is well-known by the left-wing firebrand and former Greek finance Minister, Yanis Varoufakis. Before Eurozone meetings he would receive support for his ideas in private discussions with his EU counterparts, who were keen and willing to sort out the crisis. However, once seated round the table, the very same Ministers would defer to one man: Germany’s Wolfgang Schäuble. Representatives of ostensibly sovereign nations would flip their position completely if it became clear that the Germans had made their minds up on a proposal.

In Britain, former Cabinet Minister Iain Duncan Smith watched in frustrated amazement as Angela Merkel sabotaged Britain’s attempts to control immigration during David Cameron’s failed renegotiation attempts before the referendum. Later, Duncan Smith described it as if they were “sitting in a room even though they weren’t there. There was a chair for them, a German chair. They had a veto over everything.”

All this matters because if the UK plans to sign up to a ‘Common rulebook’ with the EU it will be Germany calling the shots. Recently Dyson attracted criticism for deciding to build a new electric car plant in Singapore. According to the firm, the decision was made “based on supply chains, access to markets and the availability of expertise, which offset the cost factor”. UKIP founder Alan Sked pointed out it might have also had something to do with the regulatory framework Britain is planning to sign up to. Why would a company trying to join a new market want an EU common rulebook written by their competitors? Kept inside the EU’s regulatory framework, the German government, under pressure from Audi and Volkswagen, could conceivably out-regulate their plucky British challenger.

Sir James Dyson will be building his electric car in Singapore. Did he have any alternative? He wants to produce cars by 2020. Would he want to do so here under an EU common rule book? With German car companies making the rules? May is undermining our commercial future.

— Alan Sked (@profsked) October 24, 2018

As a recent paper by Roland Vaubel explained, if a qualified majority of member states within the EU which favour a high level of regulation gang up, they can impose higher regulations on the rest: “Thus, while regulatory collusion presupposes unanimity, the strategy of raising rivals’ costs merely requires a qualified majority.”  Vaubel says the anti-regulation coalition includes Ireland, the Scandinavian countries and the Netherlands but that various indices show that the UK has the least regulated labour market of all. If we stay tied to the EU, Britain is most at risk from damaging rule-changes.

We need to recognise that the ‘Common rulebook’ isn’t a neutral body of legal text. Like the EU itself, it is a mechanism which can – and will – be used to bend the rules to favour some nations over others. Few dare to admit this and credit is due to Sir Paul Lever who devastatingly exposes Berlin’s influence in his book Berlin Rules. Sir Bill Cash is another notable example who over the years has highlighted the hidden hand of Germany. But it’s time our negotiators recognised that the EU is not a federation of equals. Angela Merkel may be on the way out but Germany has consistently been the determiner of EU policy decisions and that won’t change after she is replaced. We must accept that if we decide to remain it will be Berlin, not Brussels, who will decide our fate.