Strengthening UK-German Relations: A New Era of Cooperation

16/10/2024

In recent months, the relationship between the United Kingdom and Germany has gained renewed momentum, underscored by Prime Minister Keir Starmer’s visit to meet German Chancellor Olaf Scholz last month. The discussions focused on trade, security, and climate change and highlighting a commitment to rebuilding trust and enhancing cooperation. As the United Kingdom seeks to build a new relationship in a post-Brexit Europe, this visit could act as a base for a new chapter in wider UK-EU relations, highlighting shared interests in security, economic cooperation, and political alignment within a changing European landscape.

Joint Defence Declaration: A Strategic Partnership

One of the most noteworthy advancements in UK-German relations is the recent security pact, celebrated as a cornerstone of future cooperation. Signed last month, the agreement marks a significant step in solidifying bilateral ties, particularly at a time when security threats are increasingly transnational. This deal is not just symbolic; it strengthens bilateral cooperation in defence, focusing on shared security challenges, including cyber threats and support for Ukraine, while also advancing joint military projects.  

Labour’s Push for Stronger EU Relations  

The dynamics of UK-German relations are also being shaped by domestic political shifts in the UK. With the Labour Party gaining power they are eager to distance themselves from the previous Conservative government who instigated Brexit in the first place. The Labour government has made it clear that it seeks to move beyond the frictions of Brexit negotiations where British negotiators did not endear themselves to their German counterparts and build a renewed constructive relationship with Brussels and key EU member states. 

This shift could be pivotal in bridging the gap between the UK and the EU, on some of the more contentious aspects of Brexit, including trade barriers and regulatory divergence. Germany, as the EU’s economic powerhouse, will be a crucial ally in these efforts.  

Germany’s Brexit “Mega Deal”: A Path Forward?

Amid these developments, Germany’s push for what some have called a “Brexit mega deal” adds another layer of complexity and opportunity. Chancellor Olaf Scholz and other German officials have signalled their interest in a comprehensive agreement that goes beyond the current Trade and Cooperation Agreement (TCA) signed under Boris Johnson. The Agreement is due for its first review in 2026, as part of the agreement to revisit every five years. The review will assess the implementation of the agreement, rather than renegotiate its terms, although it could lead to discussions on specific provisions like trade in services and law enforcement cooperation. Specific elements, such as energy cooperation and fishing rights, have transitional provisions that are set to expire in June 2026 unless renewed. 

In terms of the TCA, Prime Minister Starmer is pushing for a review to reduce trade barriers, particularly in areas like food products and professional services. However, the review process will depend heavily on EU cooperation. While some UK officials want to use this moment to expand the agreement, such as adding veterinary agreements or facilitating business travel, the EU's appetite for renegotiating the TCA remains uncertain.  

For the UK, engaging with Germany on such a “mega deal” could be a strategic move domestically, offering the potential to secure more favourable terms for British businesses, particularly in key sectors such as finance, technology, and automotive. Moreover, a comprehensive agreement could provide a framework for future UK-EU relations, with Germany playing a leading role in shaping the EU’s approach.

However, there is some scepticism within the UK of such a deal. Some British officials worry that pushing for a large-scale renegotiation might backfire, leading to unmet expectations and unwanted concessions. There is also concern that such a deal could appear to offer preferential treatment to the UK, which might strain relations with other EU member states.

The Prime Minister is hopeful of a convergence with Germany by aligning its domestic laws and regulations in areas of mutual interest, such as environmental standards, digital trade, and labour rights, without rejoining the EU. By adopting similar regulatory frameworks, the UK could facilitate smoother trade and cooperation with Germany, especially in sectors like automotive, technology, and finance, where German industry plays a leading role. 

For instance, aligning emissions standards or data protection laws could reduce trade barriers and enhance cross-border investment. Additionally, the UK could establish bilateral agreements with Germany that focus on harmonising regulations in key sectors, ensuring that both countries benefit from reduced compliance costs and increased economic collaboration. This strategic alignment would enable the UK to maintain a close partnership with Germany, leveraging shared interests to strengthen ties while preserving its independence from the EU.

The Impact of German Domestic Politics

German domestic politics could play a significant role in shaping the trajectory of UK-German relations and Berlin's influence within the EU. Chancellor Scholz’s government faces challenges at home, including managing coalition dynamics and responding to public concerns over economic stability, energy security, and the cost of living.    

The likelihood of German domestic politics significantly influencing UK-German relations and Berlin's role within the EU is high, given Germany's central position in the bloc. Chancellor Scholz's coalition, composed of the SPD, Greens, and FDP, has faced internal disagreements on key issues like energy policy and fiscal spending. These tensions could weaken Germany's ability to present a unified stance within the EU, impacting its influence on broader European policies, including those affecting the UK. 

Other European nations are closely watching Germany’s domestic situation, as Berlin's ability to lead is crucial for EU cohesion. If Germany's internal challenges persist or deepen, it could lead to a more fragmented EU, potentially emboldening Eurosceptic movements or altering the balance of power within the bloc. This could ultimately affect the outcome of negotiations or collaborations between the UK and the EU, especially if a weakened Germany is less able to counterbalance more hardline positions within the bloc.

A New Chapter for UK-German Relations?

However, the Labour government faces significant challenges in turning diplomatic opportunities with Germany into tangible outcomes. Domestically, Labour’s pro-European stance could encounter resistance from segments of the British public and political landscape still wary of deeper EU ties. Balancing this with the desire to strengthen UK-German relations while negotiating additional complex agreements will be crucial. Securing favourable terms without compromising key British interests, such as economic sovereignty and immigration control, demands careful diplomacy.

On the international front, aligning security and defence policies with Germany, while maintaining NATO commitments and the UK’s independent capabilities, presents another layer of complexity. Additionally, Labour must manage the tension between deepening UK-German trade ties and maintaining diversified global trade relationships. With lingering scepticism among EU members and broader geopolitical shifts, including US-EU relations and the Ukraine conflict, Labour’s ability to navigate these challenges will be key to forging a resilient partnership with Germany and redefining the UK’s role in Europe and beyond.