Ulrik Federspiel should be Britain’s ally in making Brexit work. His father was a Harrow-educated, British-backed hero of the Danish wartime resistance. His long career in diplomacy and business is the embodiment of Denmark’s anglophile postwar establishment and its pragmatic, free-trading spirit. A short walk from his office is the leafy Mølleåen valley, which an early translator of Shakespeare called home. Anglo-Danish affinities run deep — as does a shared nonconformist, Eurosceptic streak.
Yet when it comes to Brexit negotiations, something unexpected is stirring in the state of Denmark. National interests are running against Copenhagen’s historic instincts. Sustaining UK trade — which at its postwar peak represented half of all Danish exports — is no longer an overriding priority.
Far from taking a softer line on Brexit Britain, Denmark is turning hard. It is a canary in the mine for London’s looming EU divorce negotiation. “I’m not sure that has really dawned on the British public, or their politicians,” says Mr Federspiel. “But that is how it is.”
A former head of the Danish foreign service and prime minister’s office, Mr Federspiel straddles Copenhagen’s dilemmas. As a young diplomat in London in 1973, he watched Anglo-Danish induction into the EU, a step Copenhagen only took because Britain led the way. Now overseeing strategy for Haldor Topsøe, a Danish chemical technology company, he champions free trade around the world. And yet with Brexit, his advice is politely uncompromising.
“Britain is a country close to our hearts. There is still a lot of goodwill,” he says in his office near Copenhagen. “But our main concern is that we should not give away advantages of competitiveness to Britain or British companies.”
More important than soft terms for Britain, in other words, is ensuring that the UK remains bound by EU product regulations, environmental standards, competition rules and curbs on state support to companies — the foundations of Europe’s single market. “Britain has to accept those terms if it wants access to the single market. We cannot afford to give British companies the upper hand. We cannot take that risk.”
Those issues are part of an unsentimental reckoning with the UK, Denmark’s most important export partner for most of the 20th century.
Kristian Jensen, foreign minister, notes that in the immediate referendum aftermath Denmark dwelled on what kind of deal, soft or hard, to give Britain. “But soon after that we decided what we must go for is not what is good and bad for UK, but what is best for Denmark.”
‘Playing chess blind’
The morning after the referendum result, ashen-faced officials met in Copenhagen to establish a cross-government Brexit task force. Every ministry was drawn in, apart from religious affairs — although some believed their prayers might be useful. Holidays were cancelled, business leaders consulted, papers drawn up. “We asked the ministries to empty the policy closets. Everything,” says one official involved.
Mr Jensen compares the work to “playing chess blind” because the EU still awaits Britain’s demands. But as a small country with a lot to lose from Brexit — from dairy exports and fishing rights to public support for its continued EU membership — Denmark is further ahead in the process than most. And its conclusions surprising, even for Danes.
“The political environment says that we should be friendly to the UK, that we should not punish it. You need a friendly divorce,” says one senior figure at the heart of preparations. “Then you look at the issues, and it is clear. It’s not to our advantage to be helpful and friendly. We would lose out. The more you look at the issues the more it toughens your line.”
Brexit is bringing out a kind of national schizophrenia. The Danish establishment would prefer nothing more than Britain to stay in the EU, or failing that in the single market.
“We feel related to the Brits — we followed you in!” says Karsten Dybvad of the Confederation of Danish Industry. But the more political distance Britain demands from the union, the more inflexible Denmark becomes, for its own sake. A natural British ally is lost.
Copenhagen’s Brexit preparations offer a glimpse into the future dynamics of what has been described as the world’s most complex negotiation. From Lisbon to Tallinn, Brussels to Sofia, governments are beginning to sift through their narrow national interests arising from Britain’s EU exit talks, which are expected to formally start by April next year.
Each of the 27 states has its own special priorities. For Lithuania, it may be Russia-related security issues and the rights of the 1 in 20 of its nationals that reside in Britain. For Belgium, it pits deep political allegiance to the EU ideals with maintaining its considerable trade-flow with London. For Spain, it is perhaps the political knock-on effects for Basque separatists and the disputed status of Gibraltar.
Indeed Brexit goes far beyond just trade to span the full gamut of Europe’s national obsessions. One senior EU official half-seriously joked Greece’s interests could “boil down to their claim on the Elgin Marbles”.
While there are common EU interests — and an oversized say for Germany — many EU27 priorities conflict and cross-cut in ways that are hard to manage and predict. Brexiters are betting the instinct to preserve trade will ultimately win through; Italy will offer market concessions, as Boris Johnson, UK foreign secretary, put it last week, in order to protect its “prosecco exports”.
Whatever the calculations, one thing is clear: only once the vast majority of EU countries agree on the terms will Britain’s divorce deal come to life. Brexit will turn on the political centre of gravity of the EU27, rather than its outliers. And so far those political forces are pushing Danes and others to defend their interests in the union, over and above preserving relations with a friend.
The anti-EU currents coursing through European politics further complicate matters, especially in Denmark. Big EU decisions have never come easy to its pro-EU ruling class. Its politicians were on the losing side of referendums that rejected the Maastricht treaty in 1992, the euro in 2000 and greater justice co-operation in 2015. They fear being caught out again.
Looming large is the threat from the Danish People’s party, an anti-immigrant, anti-EU group that emerged as the second biggest party in the 2015 elections. Its leader Kristian Thulesen Dahl cheered on the Brexit vote, saying Denmark should push to give London the “best possible deal” and after that potentially ask Danes whether they “want to follow the way of the British”.
Eurosceptic leanings
While insisting that “Dexit” is not a realistic prospect, Martin Lidegaard, Denmark’s former foreign minister, acknowledges the British vote brought Danish politics to a crossroads. For pro-EU parties, the aim is to ensure Denmark will not be lured out of the union by a favourable British deal. “We don’t want to give any idea to both the EU-sceptical people in Denmark or the outside that we are on our way to a Brexit or a Dexit,” he says. “We are not.”
Making Brexit look worse than EU membership has its costs. Danish exports to the UK last year were valued at €5.3bn, just over 3 per cent of national income. Britain’s percentage of Danish exports have been in decline from more than 50 per cent after the war to near 20 per cent before joining the EU to about 7 per cent today. But this is trade Copenhagen is keen to protect. It is vital for two sectors in particular: food and fish.
Almost a quarter of Danish exports to Britain are food and drink from dairy products to bacon. Its fishing industry — the world’s fifth-biggest exporter of fish and fish products — is also reliant on agreements with Britain. One EU official estimates that almost a third of the Danish catch comes from UK waters.
Brexit poses a tremendous challenge for these often very vocal Danish industries. Fishing rights and quotas, export tariffs, customs checks — fundamental elements of the business model are under question.The lobbies are mobilising, as Brexiters predicted. But for now the politicians are sanguine.
Mr Jensen compares it to other political crises that Danish business has weathered: “Right now [exports to] Russia have been shut down. [But] Danish agribusiness has found new markets. China is on the rise, India is on the rise, Africa is on the rise. [In any case] right now Britain doesn’t have the industry, the agribusiness, to fill in the gaps.”
A bigger concern for the EU27 is the future of the single market. This is Denmark’s economic playing field, its greatest wealth-generator, and the prize it stands to lose from either yielding to Euroscepticism, or seeing protectionism take hold on the continent.
“Something like 50 per cent of Danish GDP is exports and 70 per cent of that is to Europe,” says Bjarke Møller of the Europa think-tank. “Mainly to the single market and Germany, not the UK. Isn’t it obvious where our interests lie?”
“You should not underestimate the dynamics,” adds Mr Møller. “Denmark is a country with open politics, open trade, a country that wants to engage with the world. We need exports and open markets. Losing that or threatening it . . . could have a huge impact on the economy and our politics.”
Fight for the spoils
Denmark is also fixated on its competitiveness. Britain is seen as a rival for investment, whatever direction it takes with Brexit. Danes fear London will relax regulations, standards or taxes to entice business. Britain’s dealings with Nissan — and speculation about sweetheart terms to convince the carmaker to build new models in the north of England — has touched a nerve. Copenhagen’s conclusion is to be tough on access.
“If you have five similar tennis courts and on four of them you pay a fee and the fifth is free, who will pay to play?” asks Mr Jensen. “So if you don’t want to pay the fee, you can’t have the same possibilities. It is for the UK to decide.”
Among the other considerations are what can be gained. Top of the list is the European Medicines Agency, a London-based regulatory jewel that the EU is preparing to move. Denmark will fight for its new home to be Copenhagen, bringing with it 1,000 highly-skilled staff that act as a magnet for the life sciences industry. A dozen or more EU countries have also lodged an interest.
“We’ll be rather selfish,” predicts Mr Lidegaard, the former foreign minister. “Brexit has changed it all. Instead of looking at the common benefit and pool our interest, we will get into a game where all of us look more selfish, more narrow-minded,” he says. “And I’m afraid. I’m afraid because I’m pro the European project, and by the end of the day I’m not sure this [game] will benefit any of us.”
Letter in response to this article:
Be assured Britain has many friends in Denmark / From Lars Seier Christensen
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