SPIEGEL Interview with Wolfgang Schäuble 'Britain Is a Leading Nation'

German Finance Minister Wolfgang Schäuble warns of the dangers of Brexit, talks about the EU's crisis of confidence and considers the English fear of the penalty kick.
German Finance Minister Wolfgang Schäuble

German Finance Minister Wolfgang Schäuble

Foto: Werner Schuering / DER SPIEGEL

SPIEGEL: Minister Schäuble, you are the only top German politician who has travelled to Britain to campaign for the country to remain in the EU. Why is everyone else holding back? Is German support not welcome in Britain?

Schäuble: I also, of course, asked myself whether it is helpful for German politicians to be telling British voters what to do. I put the same question to my British counterpart, George Osborne, who had asked me to talk about the issue in London. He allayed my fears, and so I explained to the British public why I believe that it is better for the EU and Britain if voters decide against Brexit.

SPIEGEL: Polls show that the outcome of the June 23 referendum is completely up in the air. If the British vote against the EU, your project for achieving ever closer integration in Europe will be on the verge of failure.

Schäuble: I hope and believe that the British will ultimately decide against Brexit. The withdrawal of Britain would be a heavy loss for Europe.

SPIEGEL: Why is it better for the EU if the British remain? They have repeatedly distanced themselves from the EU in recent years.

Schäuble: Britain is one of the strongest economies in the EU, and London is Europe's largest financial centre. Britain plays a leading role in all matters of foreign and security policy. That is why Europe is stronger with Britain than without it. Besides, the UK consistently advocates market-based solutions in Brussels, which frequently makes it an ally of the German government. And, in my view, one cannot have enough British pragmatic rationality in Europe.

SPIEGEL: And why is it better for the British to remain in the EU?

Schäuble: Britain is economically very closely integrated with its European partner countries. Were these ties to be cut, it would be a huge step backwards for the country and would weaken it considerably. In the era of globalisation, "splendid isolation" is not a smart option.

SPIEGEL: But Britain could continue to enjoy the benefits of the single market without being an EU member, in the same way that Switzerland and Norway do.

Schäuble: That won't work. It would require the country to abide by the rules of a club from which it currently wants to withdraw. If the majority in Britain opts for Brexit, that would be a decision against the single market. In is in. Out is out. One has to respect the sovereignty of the British people.

SPIEGEL: The OECD and the IMF are warning that the British could see massive income and prosperity losses in the event of Brexit. Is this fear-mongering?

Schäuble: I do think the calculations are at least reasonable. The close economic integration offers advantages for everyone involved, so it would be a miracle if there were no economic drawbacks following a British withdrawal. But I do not know whether British voters will be convinced if international organisations weigh in too heavily on this issue.

SPIEGEL: Your British counterpart George Osborne warns the British will be creating their own recession if they vote against remaining in the union. Do you worry about the possibility of contagion?

Schäuble: If Brexit came to pass, it would of course have negative consequences and create risks for Britain's partner countries. But my counterparts in the eurozone and I will do everything possible to contain these consequences. We are preparing for all possible scenarios to limit the risks.

SPIEGEL: What exactly can you do?

Schäuble: The ECB is making preparations, just as the Bank of England is. The European commission and the governments of partner nations are also, of course, preparing for possible scenarios. No one knows how the markets would react on the day after a decision like this. Perhaps nothing would happen at all because investors have already factored everything in. If the British do actually vote to leave the EU, it will be important to remain calm and offer the markets some orientation on which way the road will lead. Then we would have to say: "We now have a decision that we did not want, but let's make the best of it". There would still be no reason for panic. This process of separation would take a while. A withdrawal of this magnitude does not take place overnight. It would be preceded by lengthy negotiations. But of course everyone hopes that these emergency scenarios will not occur at all.

SPIEGEL: The domestic policy consequences in the UK could also be dramatic. Do you believe Brexit would fuel renewed efforts towards Scottish independence, because the Scots are clearly more closely aligned with Europe than the English are?

Schäuble: The Scots want to remain part of Europe, and a vote against their will could reignite the push for independence. Northern Ireland is also important. The conflict there was contained by the fact that Ireland and Britain are both members of the EU.

SPIEGEL: As a dedicated European, you have been particularly vehement in advocating deeper European integration, also at the political level. What happens if the British example catches on and other countries decide they want less Europe or even to leave the EU?

Schäuble: That cannot be ruled out - it is conceivable theoretically. How, for example, would the Netherlands react, as a country that has traditionally had very close ties to Britain? It is important for the EU to send the message that it has understood the vote and is prepared to learn from it.

SPIEGEL: How, exactly?

Schäuble: In response to Brexit, we couldn't simply call for more integration. That would be crude, many would rightfully wonder whether we politicians still hadn't understood. Even in the event that only a small majority of the British voters reject a withdrawal, we would have to see it as a wakeup call and a warning not to continue with business as usual. Either way, we have to take a serious look at reducing bureaucracy in Europe. And in some areas, we also need to find our way back to the member states assuming more autonomy, as the British are demanding.

SPIEGEL: Greater autonomy instead of deeper integration: that would contradict everything you have fought for in Europe to date. Which areas do you have in mind?

Schäuble: Not at all. A strong Europe is not a bureaucratised Europe. More autonomy and adherence to mutually agreed-upon rules are precisely the foundation we need. We must strengthen the EU in those areas where it offers true added value relative to national approaches. Just look at foreign policy or defence. What can an individual country achieve in these areas? We need the British if Europe is to punch at its proper weight and have a significant voice in the world.

SPIEGEL: In the past, Britain has repeatedly blocked key decisions and obstructed integration.

Schäuble: No, Britain has never stood in our way. The British government has consistently given a free hand to those countries that wanted to move forward, on monetary union, for example. It's a little different in foreign and security policy. This is where, compared to other EU countries, Britain and France bear the greatest burden and make the biggest contribution. In that area, Britain is a leading nation.

SPIEGEL: Nevertheless, France and Germany were far more involved in the Ukraine crisis, for example.

Schäuble: In this particular case, I would have liked to see the British government assume more responsibility. I always regretted the fact that only the French president joined the chancellor in negotiating with Russian president Vladimir Putin. The British prime minister was missing there. But what's missing now could always come later.

SPIEGEL: Because it is an island, Britain has always had a distanced relationship with Europe.

Schäuble: British policy was never centred on Britain itself, but was instead always oriented towards Europe. Whenever anyone on the European mainland tried to oppress other countries, the British were their most prominent adversaries - and they tipped the balance each time. That was true in the fight against Napoleon 200 years ago, just as it was against Hitler 80 years ago.

SPIEGEL: Twenty years ago, you proposed a Europe of different speeds. The goal was to ensure that countries like Germany and France would not be slowed down by countries less willing to integrate. Instead, we could now be getting a Europe in which some are driving in reverse.

Schäuble: The goal of European unification can only be achieved if everyone participates, perhaps with exceptions in some areas. Not all countries are part of monetary union, and not all are in the Schengen area. But the fundamental goal should be to keep everyone on board.

SPIEGEL: How dangerous would Brexit be for the EU? Would it fundamentally call the union into question?

Schäuble: Europe will also work without Britain if necessary. At some point, the British will realise they have taken the wrong decision. And then we will accept them back one day, if that's what they want.

SPIEGEL: The Brexit referendum is not the only threat to Europe. In general, approval of the EU has declined sharply. How deep is the crisis in the European Union?

Schäuble: Europe has grown through crises. Each crisis also presents opportunities, and Europe has emerged stronger from each one. That will also be the case this time. That is the way history unfolds. Just look at the euro. Six years ago, when many member states were in turmoil, many no longer thought the common currency had much of a future. Today Spain, Portugal, Ireland and Cyprus have overcome the crisis, and much has also happened in Greece. The euro is the uncontested second reserve currency in the world, and it is stable. Europe is sometimes slow, and it reacts sluggishly, but it is capable of finding solutions.

SPIEGEL: The refugee crisis is not exactly a successful example.

Schäuble: But Europe has reacted here too. We have reached an agreement with Turkey and we will become more involved in North Africa. We also need Britain to pitch in here. The country provides a bigger security and defence contribution than any other member state. The story is similar with overseas development aid. That is why Britain is, and should remain, a valuable member of the EU.

SPIEGEL: In the event of Brexit, Germany's dominance in the EU would further grow. Would Germany not then have to assume even more leadership?

Schäuble: The others are always calling for German leadership, but we are criticised as soon as it is exercised. One country alone cannot lead Europe, especially not Germany. We need France, and we need a stronger, more committed Poland. The EU is far better balanced with Britain than without it. And the more Britain gets involved, the better Europe works.

SPIEGEL: To what extent is the anti-EU sentiment in Britain also an expression of opposition to an EU dominated by Germany?

Schäuble: I do not see that at all. The view of Germany among the British has changed considerably. Polls show this, and you got a sense of it through the wonderful exhibition on Germany at the British Museum. We Germans have also made this new image possible. We have managed to convince the world that the image it had of us no longer corresponds to reality in 2016. The 2006 World Cup helped contribute to that change. And people in many parts of the world will not forget the images from Munich's central station on the day the refugees arrived.

SPIEGEL: But it was precisely Merkel's refugee policy that was perceived in Europe as Germany acting unilaterally.

Schäuble: It was and is right to insist that the principle of open borders in Europe should not be abandoned. Just as it is incorrect to assume that this problem can be solved simply by implementing better controls on Europe's external borders and by working together with Europe's neighbouring countries. The agreement with Turkey is necessary. But the refugee crisis requires greater solidarity within Europe. Other Europeans have nothing to reproach us Germans for. In fact, the others have some catching up to do.

SPIEGEL: But the dispute and the bickering in the refugee crisis and the euro crisis are also examples of how the EU does not always present itself in the best light. Is this why many people develop resentment towards the EU?

Schäuble: There are people in the member states who are using this to stir up resentment against European integration. Faced with the uncertainty of the modern world and the immensity of globalisation, they feel the need to take refuge in the things they know best. But that is the wrong response to globalisation. Nobody is going to bring back the good old days. We need an awareness that openness is good for us, and that it is our future.

SPIEGEL: On this issue, we see divided societies all across Europe: in Austria, France, Britain, Hungary and Poland. How certain are you that countries like Hungary and Poland still even share our common European values?

Schäuble: European values have great appeal and are shared by the overwhelming majority of Poles. For Poland, in particular, European values were the driving force that ultimately achieved something that we Germans thought was impossible: the fall of the Berlin Wall. We are now experiencing a setback, but I am optimistic. Poland is not lost yet. The Polish government is responding to pressure from Brussels. Europe matters.

SPIEGEL: On the other hand, we see that countries at Europe's periphery are increasingly turning away from European values, like Russia, Turkey ...

Schäuble: I believe European values are attractive if people are allowed to choose. We see this in China, in Latin America, in the Arab world and in Russia, too. Unfortunately, we are not as convincing as we would like to be when it comes to proving that we stand behind our own values. But that is part of the European recognition that humankind is imperfect, even Europeans.

Wolfgang Schäuble (center) during his SPIEGEL interview with editors Christiane Hoffmann and Christian Reiermann in Berlin.

Wolfgang Schäuble (center) during his SPIEGEL interview with editors Christiane Hoffmann and Christian Reiermann in Berlin.

Foto: Werner Schuering / DER SPIEGEL

SPIEGEL: No matter how the referendum goes on June 23, Britain will be a divided country.

Schäuble: What do you mean by divided? Democracy is based on the right to have different opinions. Once the British have made their decision on June 23, they will accept it together. They are proven democrats and they do not need any tutoring from Germany.

SPIEGEL: You have used extremely rational arguments when discussing your opposition to Brexit. But as a native of the Baden region on the French border, you have an emotional and very personal relationship with France. Does your heart also beat for Britain?

Schäuble: I have always greatly admired and respected Britain. Its contributions, especially those of Winston Churchill, to European and to German history are remarkable. London is an impressive city and the scenery in many parts of Britain is breathtaking. But that does not mean that everything is great. I certainly appreciate French cuisine more than British food. And (laughing) the British aren't the best at penalties, either, are they?

SPIEGEL: Minister Schäuble, we thank you for this interview.

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