May strikes a friendly note at Davos, despite ′hard Brexit′ vision | Business| Economy and finance news from a German perspective | DW | 19.01.2017
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May strikes a friendly note at Davos, despite 'hard Brexit' vision

After announcing a hard Brexit earlier this week, the British prime minister offered words of friendship in Davos. That wasn't enough to stop talk of a potential collapse of the European Union.

Two large banks have announced in Davos that they will cut jobs in Britain due to its planned exit from the European Union. Axel Weber, head of Switzerland's UBS, said 1,000 of its 5,000 jobs in London could be affected. And HSBC CEO Stuart Gulliver announced that his bank would move jobs to Paris, which had previously generated only about one-fifth as much business as London.

British Prime Minister Theresa May did not mention these job losses at the World Economic Forum. She said only that "Britain must face up to a period of momentous change. It means we must go through a tough negotiation, and forge a new role for ourselves in the world. It means accepting that the road ahead will be uncertain at times, but believing that it leads to a brighter future for our country's children and grand-children."

Hard Brexit, gentle words

On Tuesday, May announced in London she was pursuing a "hard Brexit" - a departure from the EU that would also mean exiting the single market. But in Davos she was eager to strike a more conciliatory tone. In this respect, she was in harmony with German Finance Minister Wolfgang Schäuble, who had warned against flexing muscles ahead of the WEF. "We should not threaten each other before the negotiations start," Schäuble said.

In Davos, May avoided mentioning even the smallest concrete detail of her negotiating goals. Her speech did not even concede that there are different Brexit options.

There was not even a word about the plans she announced on Tuesday to turn Britain into a tax paradise to attract companies. Only a very general invitation to entrepreneurs and investors: "Britain is and will always be open for business. Open to investment in our companies, infrastructures, universities and entrepreneurs. Open to those who want to buy our goods and services, and open to talent and opportunities from the arts to technology, finance and manufacturing."

So much else

To the other EU members, May said "It remains overwhelmingly and compellingly in Britain's national interest that the EU as an organization should succeed."

"Our decision to leave the European Union was no attempt to reject our friends in Europe, with whom we share common interests and values and so much else," she said. "It was no attempt to become more distant from them, or to cease the cooperation that has helped to keep our continent secure and strong. Nor was it an attempt to undermine the European Union itself."

Ana Botín, executive chairwoman of the Spanish bank Santander, said she regretted the Brexit decision. "It was a sad day for me," she said in Davos. "We know it's a clear exit. But a clear exit doesn't mean we cannot collaborate and cooperate."

"We remain totally committed to the UK," she said. "We have 14 million customers there and 18,000 employees. So we are a British bank."

Despite the display of goodwill, Brexit has been causing heated discussions in Davos. Slovakian Foreign Minister Miroslav Lajcak says the upcoming negotiations are "a very strong test" for the EU. " It must show our ability to act as one, to stay together and to know what we want."

When the going gets tough

But the ability to act as one is precisely the Europeans' biggest problem. Dutch Prime Minister Mark Rutte offered a clear rejection of deeper political integration: "This whole idea of an ever closer union is now really buried. It's gone."

This left Germany's Martin Schulz, who was president of the European Parliament until a few days ago, apoplectic. "I expect from leaders in Europe that they do not say 'An ever closer union is over,'" he said.

"I expect from them to say: 'More than ever, we have to stick together.'"

Rutte replied coolly that the romanticized talk of a European superstate was the fastest way to make the EU fail. He said only pragmatism and economic reform could save the bloc: "For France and Italy to implement reforms - that's crucial. If they don't do it, I'm worried that Europe will be in very difficult circumstances."

Brexit, pragmatism, unity and structural reform - Davos has laid bare the fact that the future of the EU is still completely open.

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