Brexit break-up with UK means Varadkar needs to woo Merkel

Last Friday, as Taoiseach Leo Varadkar tilted at imaginary windmills in Washington, Berlin rocked its way into St Patrick's Day. In the legendary Berghain club, the peeling gold paint on the ceiling quivered as Ireland's Candice Gordon delivered a knockout set.

Like Joan Jett fronting Thin Lizzy, she bellowed:"You know my time has come . . . Destiny hold me closer/It's inevitable/It's only you."

Timely thoughts for Varadkar on his inaugural Berlin visit today to begin his wooing of Chancellor Angela Merkel.

As Ireland's decades-old political and policy dependency on London comes to a sudden end in Brussels, Ireland is nursing a mighty Brexit hangover.

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We need new partners in Europe and Germany, Dublin has decided, is to be one of them. The key question now is: why should Germany – or Merkel – care?

It’s a good sign that Merkel, scarcely a week into her fourth term, will welcome Varadkar with full military honours for a working lunch.

Brexit is far less present in German minds or media than in Britain or Ireland

Varadkar is anxious to make his own the close ties to Merkel he inherited from Enda Kenny, both as Taoiseach and as head of Fine Gael head, a sister party to her ruling Christian Democratic Union (CDU).

Post-Brexit refrain

As transatlantic trade ties tense up, he can give her his readout on last week’s meetings with US president Donald Trump. At a joint press conference, meanwhile, he will reiterate Dublin’s post-Brexit refrain that Ireland is not leaving the European Union and will remain an active partner.

Amid ongoing London procrastination on the Brexit border question, where a solution remains uncertain despite Monday’s announcements in Brussels, he hopes Merkel will reiterate – in public and in private – her insistence that Dublin’s concerns are Berlin’s concerns.

Brexit is far less present in German minds or media than in Britain or Ireland. But whenever it comes up the real risks to prosperity and peace are teased out fairly in radio reports, newspaper features and, as recently as last week, a packed panel discussion on an icy Berlin evening. Dublin is pushing here at an open door.

Beyond Brexit shadow-boxing with Britain, meanwhile, lies the growing EU future reform debate as pushed by French president Emmanuel Macron.

On this Varadkar is likely to echo a recent warning by eight northern European finance ministers, including Paschal Donohoe, that talk of a euro finance minister is wishful thinking until everyone – read France – meets existing – read budget deficit – rules. Such talk goes down well with Merkel's conservative backbenchers, wary of reforms that would cost their voters more money.

Speaking of money, Berlin has in Dublin a rare ally: another capital that has expressed readiness to step up and pay more into the EU budget to fill the hole left by London.

But the Irish recovery – a welcome good news story in Germany – changes the game. Tax avoidance is a poisonous political issue in Berlin

Varadkar knows he needs to build up goodwill in Berlin given another looming challenge. Merkel's new coalition agreement – carrying the fingerprints of her Social Democratic Party (SPD) partners – vows to take on "tax dumping" and namechecks as prime offenders Facebook, Google and Apple – all with European headquarters in Ireland.

Ireland insists it will not bow to external pressure but its tax regime is a growing blot on its copybook here and is even now a joke in a new Berlin musical that premiered last week.

A Berlin government spokesman insists there is no "link in substance" between tax and Brexit, but well-placed watchers here say the political link cannot be wished away. A decade ago, Merkel rebuffed Nicolas Sarkozy's plan to exploit crisis Ireland's dependency on the EU to force changes to its corporate tax regime.

Berlin accepted Irish arguments that it would undermine the already enfeebled economy. But the Irish recovery – a welcome good news story in Germany – changes the game. Tax avoidance is a poisonous political issue in Berlin. With France, Germany is working on bilateral corporate tax convergence plans which, a finance ministry officials says, “should cross-fertilise the wider EU corporate tax debate”.

The tax issue is now in play – see Wednesday's European Commission plans for a "digital tax" on EU turnover. Moving with, and shaping, that debate, rather than tilting at fiscal windmills of yesteryear would indicate in Berlin that Ireland means business.

Three things needed

To do the business here, though, you need three things: ideas, money and the German language.

Minister for Education Richard Bruton returned from his St Patrick’s Day visit here with good ideas that must now become priorities in Dublin. In particular, Ireland should leverage its unique selling proposition – as the only native English-speaking nation left in the EU – to boost school and research exchanges.

Extended school exchanges for Irish students here would complement their Stem skills with the German language and open an underexploited world of German universities, engineering giants and multibillion-euro German state research funds. To prove Ireland is serious how about, in return, a “shamrock fund” to finance German researchers who partner with – or research in – Ireland?

Culture is a way of framing new Irish engagement with Germany. But that will mean Dublin extending to Berlin the Irish taxpayers’ multimillion-euro generosity already enjoyed by the Irish Centre in New York and the Irish College in Paris.

A final, crucial sign that times have changed would be to retire the tired tradition of Irish taoisigh visiting Germany like it was a burning house in Berlin: grabbing what they can in a quick in-and-out.

A Taoiseach determined to wed his country to Germany, without spending any time here, looks like a father pushing a doomed, arranged marriage.