German coalition troubles could mean more Brexit delay

by Quentin Peel | 20.11.2017

The sudden collapse of coalition in Berlin has thrown a new spanner into the works of the parallel negotiations on Brexit in Brussels.

Talk of the most serious political crisis in Germany in decades is almost certainly exaggerated. There is no mood for revolution in the country, nor any sense of impending doom. The German economy is motoring along quite nicely. But it now looks as if it could be months before a new government is in place with a stable majority in the Bundestag. And the election of a far-right faction in the parliament from the Alternative for Germany is a noisy nuisance which complicates the coalition arithmetic.

Failure to reach early agreement on a “Jamaica” coalition of Christian Democrats, liberal Free Democrats and Greens (their party colours of black, yellow and green match those of Jamaica’s national flag) has left Angela Merkel as a hobbled Chancellor, no longer the dominant political figure on the European stage. Any hope in Downing Street that Merkel might suddenly deliver a generous Brexit deal should be well and truly scotched. It means that the EU-UK negotiations will be firmly led by Michel Barnier in Brussels, with Berlin taking a back seat.

Just as there will not be any dramatic breakthrough on Brexit, nor will there be on Emmanuel Macron’s plans for eurozone and wider EU reform. There will be frustration on all sides in the rest of Europe.

Although the Jamaica deal would have been the most complicated coalition in the federal republic’s history – combining conservatives, liberals and Greens – most observers thought it would succeed. It was the outcome that the public wanted. Then on Sunday, close to midnight, the liberal Free Democrats walked out in a huff.

Nobody is quite sure why. Both Christian Democrats and Greens seemed to think they were close to agreement on the toughest questions such as immigration, refugee rights and phasing out coal-fired power stations. There had been no big disagreement on European questions so far.

Frank-Walter Steinmeier, newly elected as state president, is not going to rush into calling a new election. The chances are it would not help. The polls suggest that there has been no shift in party support. Instead, he lectured all the political parties on their constitutional responsibility to exhaust every avenue to forming a government. He will summon the party leaders one by one. As for Merkel, she is still the most powerful and most popular leader in the land. She must be voted down three times in the Bundestag before new elections can be held. Nothing will be rushed.

There is no sign of any shift in her Brexit policy: she doesn’t want to punish the UK, but neither does she want to reward the Brexit process. She is adamant that you cannot walk out of the EU internal market, and all its institutions, and keep all the benefits. That is the message that has been hardwired into Barnier’s instructions. If Theresa May comes up with some sort of grand bargain in the next few months – an extremely unlikely prospect, given the chaos in the Cabinet – it seems just as unlikely that Berlin would be able to respond.

All things considered, the chances of sticking to the current two-year Article 50 deadline have all but evaporated. At the very least, someone is going to have to stop the clock.

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Edited by Hugo Dixon