Merkel Enters Brexit Fray as EU Seeks Shield From U.K. Turmoil

(Bloomberg) --

Angela Merkel will this week stage her most significant intervention in the Brexit process in more than two years, as the European Union moves to shield itself from the fallout of political chaos in Britain.

The German chancellor is to hold talks with Irish Prime Minister Leo Varadkar in Dublin on Thursday and demand a plan to protect Ireland's border should the U.K. crash out of the bloc without a deal, which could come as soon as April 12. The EU now sees this as a serious possibility and is focusing almost all of its work on how to contain the consequences, EU officials said.

Merkel's intervention comes as relations between the U.K. and EU hit an all-time low after Prime Minister Theresa May's Brexit deal was defeated in Parliament at the third attempt on Friday. EU officials say they can do no more to help the British government. The bloc has given the U.K. about another week to notify of the way forward, as it prepares an all-important summit in Brussels on April 10.

May, who might make a fourth attempt to win Parliament's support for her deal this week, is considering calling a general election to help break the Brexit deadlock. Her cabinet is split, with some ministers urging her to take the U.K. out of the EU without a deal on April 12 and others saying they'd quit if that becomes her policy.

Border Preparations

Merkel's talks with Varadkar come amid increasing concern in Germany that Ireland hasn't made sufficient preparations to protect the Irish border -- the EU's new external frontier after Brexit -- in the event of no deal. At an EU summit 10 days ago, Merkel admonished Varadkar for Ireland's lack of a plan, officials said. Ireland still doesn't acknowledge how urgent the situation is, according to one of the officials.

After trying to remain above the Brexit fray since negotiations between the U.K. and EU began almost two years ago, Merkel is becoming much more active, as the threat of no-deal looms. Underlining the frustration in Berlin with the situation, Deputy German Foreign Minister Michael Roth on Saturday accused “90 percent” of the British cabinet of having “no idea how workers think, live, work and behave” because they were “born with silver spoons in their mouths.”

Merkel's role will also prove crucial if the U.K. requests a long Brexit extension. Germany is one of several countries willing to give Britain time, especially if May calls a snap election, according to officials. French President Emmanuel Macron has argued against such a move. Approving a Brexit delay would have to be unanimous among the 27 EU leaders.

The critical need to prevent a “downward spiral” from turmoil in London and a potential no-deal exit from damaging the rest of Europe is now the priority of the EU's 27 remaining governments, according to a diplomatic note of talks between envoys in Brussels last week.

Intractable Problem

The Irish border issue has become an almost intractable problem. The EU's proposed “backstop” arrangement, contained in the Brexit deal rejected three times by the British Parliament, is aimed at preventing the need for infrastructure and visible checks on the frontier by keeping the U.K. in a customs union with the bloc until a replacement solution is found.

But Ireland, which insists there can be no return to a hard border -- a symbol of decades of violence which ended with a peace accord in 1998 -- has been reluctant to spell out what would happen if the Brexit deal fails. The EU will oblige Ireland to check the flow of goods across the frontier because of Ireland's place in the bloc's customs union and single market, but officials are working on ways to ensure this can happen as much as possible away from the border, people familiar with the matter said.

--With assistance from Alex Morales and Iain Rogers.

To contact the reporter on this story: Ian Wishart in Brussels at iwishart@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Nikos Chrysoloras, V. Ramakrishnan

©2019 Bloomberg L.P.