What the German election means for the UK

What the German election means for the UK

As Theresa May unveiled her Brexit plan in Florence, France’s Emmanuel Macron was putting the finishing touches to his project to deepen eurozone integration. Both have been waiting on the German election — the prime minister in the hope that a re-elected Angela Merkel would give a push to negotiations, the president in the expectation that Paris and Berlin could now restart the long-stalled Franco-German motor. Sunday’s results mean they will have to wait a while longer.

Mr Macron was always very much at the head of the queue, but now he can expect to see his ambitions for the euro matched by Berlin’s determination to strengthen the Schengen border system. Somewhere here there might be an eventual political trade-off.

Ms Merkel was the winner and loser of the election. Winner because it assures her of a fourth term; loser because the share of the vote won by her conservative CDU/CSU partnership dropped by more than 8 percentage points compared with 2013 — and the principal beneficiaries were the rightwing extremists of Alternative for Germany. The nativist AfD, which waged an unapologetically Islamophobic campaign, capitalised on Ms Merkel’s decision in 2015 to open Germany’s borders to 1m refugees from the Middle East and beyond.

The AfD’s projected vote share of about 12.5 per cent narrows the options for a new coalition. Martin Schulz’s Social Democrats, which saw its vote sink to a fifth of the electorate, has already ruled out another grand coalition. That leaves the chancellor seeking to strike a deal with the Greens on the left and the liberal FDP on the free market right.

Neither of these two small parties like each other. Both will demand big concessions from the chancellor. And Ms Merkel will be looking over her shoulder at those in her own party who will now begin to talk about when she might stand down.

One immediate impact will be to increase the urgency with which Berlin seeks to shore up the Schengen accord, in order to address the migration issue. Tougher controls on external borders and a more equitable distribution with the system of legitimate refugees are the priorities. Expect new clashes between Germany and the nativist governments of Hungary and Poland.

In the circumstances, Mr Macron’s grand plan for the euro — he wants a large eurozone budget, the appointment of a euro finance minister, a European monetary fund, and a common bank deposit insurance scheme — is likely to generate even less enthusiasm in Berlin than during the campaign.

Ms Merkel has signalled she is prepared to take one or two baby steps in France’s direction — perhaps a finance minister with a small budget. The chancellor understands the political importance for Europe of rebuilding the Franco-German partnership. In this she will have the support of the Greens. But the FDP has set its face against further integration, and the AfD’s antagonism to the euro and all its works is central to its nationalist pitch. Overall, this election was one that saw Germany looking inwards rather than outwards. The message to Mr Macron? A new euro pact will have to be modest in its ambition and, above all, avoid any requirement for treaty change.

Where does this leave the UK? Mrs May has still less to celebrate. Even before the result, the chancellor was voicing exasperation at the British government’s expectation that Berlin might lean on the EU negotiating team led by Michel Barnier to take a softer line. The prime minister’s speech did not change the equation, largely because German politicians and officials were as aware as any at Westminster of the claims by Boris Johnson, the foreign secretary, that he had taken Mrs May hostage over the terms of Brexit. Ms Merkel has better things to do than mediate in disputes within the British cabinet.

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