Merkel: Brexit A 'Wake-Up Call' For The EU

Brexit is a 'wake-up call' for the EU, says Angela Merkel

•  James Crisp

Brexit is a “wake-up call” for the European Union, Angela Merkel has said in a warning that Britain will emerge as an economic competitor to the bloc after it leaves the EU.

The German Chancellor called on the remaining EU leaders to make Europe more competitive to meet the challenge of Brexit, as well as economic heavyweights such as the US and China. 

Mrs Merkel said the EU had to become “attractive, innovative, creative, a good place for research and education.”

“Competition can then be very productive,” she told the Financial Times, before describing the EU and its single market as Germany’s “life insurance”. 

“With the departure of Great Britain, a potential competitor will of course emerge for us. That is to say, in addition to China and the United States of America, there will be Great Britain as well,” she said in October last year. 

Mrs Merkel admitted there was a risk of the EU becoming collateral damage in a US-China trade war and said the bloc needed to take action. 

“The United States’ focus on Europe is declining — that will be the case under any president,” she said. 

“Can the European Union come under pressure between America and China? That can happen, but we can also try to prevent it,” said Mrs Merkel, who has been accused of effectively blocking eurozone reforms championed by Emmanuel Macron. 

The German Chancellor’s comments will further stiffen the European Commission’s resolve to tie Britain into commitments on fair competition as part of the new UK-EU trade deal. 

Brussels is anxious that the UK government will use Brexit to slash EU regulation in tax, state aid and the environment to undercut the bloc and create a “Singapore on Thames”.

Some EU countries, such as France, are pushing for “level playing guarantees” that will force Britain tied to EU rules and standards even as they change over time. 

Britain appears certain to leave the EU on January 31, 2020, which will trigger an 11 month transition period, deep-freezing the UK’s membership of the single market and customs union.

The transition period allows for trade negotiations with Brussels for a replacement UK-EU relationship with a deadline of the end of the year. 

With Britain keen to diverge from EU rules after Brexit, the negotiations are likely to be difficult. Boris Johnson has vowed he won't extend the deadline after senior EU figures warned the time to finalise the deal was very short.