German political crisis threatens Brexit negotiations

The impact of losing Berlin's voice in Britain's EU exit talks is causing concern among UK mandarins

German chancellor Angela Merkel, right, and British prime minister Theresa May, left, have both been plunged into a political crisis in their respective countries. Michael Sohn / AP

A leadership vacuum at the heart of Europe threatened to overshadow negotiations on the British exit from the EU after Angela Merkel faced a fresh general election in the new year having failed to form a coalition.

British officials were warned that Berlin’s key leadership role, personified by the long-serving Mrs Merkel, could not be relied on to break the logjam in the negotiations.

Thomas Matussek, a former German ambassador to London, said Germany would be missing in action in the coming weeks. “I think the German instability is bad news for Britain, it’s bad news for Europe but, most of all it is bad news for the Germans,” he said. “In the medium and long term, of course it would be very, very bad if the German input is missing [from Brexit].

“You have a normally loud and constructive voice which has been silenced. You have a country that is looking inward and is self-absorbed.”

A prolonged period of German political infighting could cause permanent damage to the relationship between the two biggest economies in Europe. “Germany has a special interest to keep a special friendship with Britain after Brexit,” he added.

Iain Duncan Smith, a former cabinet minister and leading voice for leaving Europe, said Mrs Merkel’s troubles made nonsense of arguments that Theresa May should increase her offer of £18 billion in continuing financing to the EU budget after Britain quits.

“When you look at what’s going on in Europe, the idea that any kind of understanding can come out of that situation is clearly not right, so we will have to sit tight,” he told The Times newspaper.

But one of Mrs Merkel’s ministers retorted that the British would be unwise to stall the talks until a German government was formed.

“Time is running out,” said Christian Schmidt, the food and agriculture minister. “This is not a game, winner or loser, this a responsibility. There is no way just to rely on anybody being weaker or stronger in the coming weeks.”

One of Mrs Merkel's oldest political allies said a spirit of compromise between parties would avert a crisis. Wolfgang Schaeuble, president of Germany's 709-seat lower house, which elects the chancellor, said the parliament elected in September could still "preserve the political decision-making ability that's rightly expected of us".

"It is a test, but it's not a crisis of the state," Mr Schaeuble, 75, said.

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The prospect of a minority government soldiering on by cutting deals with opposition parties on a vote-by-vote basis has been all but ruled out. “I don't think there'll be a minority government. In any case, it would lack more than 20 to 30 votes. Under such circumstances, you'll be unable to govern. You have to have majorities. In the absence of such, and if a grand coalition is also ruled out as an alternative, then there'll be simply only one option: paving the way for new elections,” said Christopher Hack, a German political analyst. “This country in the heart of Europe, is almost unable to govern, and this is viewed abroad with great skepticism. It could not be worse. Minority governments are of course doomed to fail sooner or later, because they don't have majorities of their own.”

Attracting a junior partner to ensure a majority is also fraught with difficulty.

The most obvious route out of the crisis would be a change of heart by the Social Democrat Party (SPD) which has ruled out another so-called grand coalition in Mrs Merkel’s fourth term.

Germany’s president, Frank-Walter Steinmeier, started talks on Tuesday with all the parties to explore options for an alliance with Merkel.

The Social Democrats, part of Merkel’s “grand coalition” over the past four years, are refusing a rerun after suffering their worst electoral defeat since the Second World War. SPD policy victories, such as a national minimum wage and gender quotas for supervisory boards, didn’t prevent the party’s decline.

Since the election its ministers have continued to hold caretaker cabinet functions.  Sigmar Gabriel, the SPD foreign minister, caused a major rift with Saudi Arabia this week by suggesting Lebanon's Prime Minister Saad Hariri had been held against his will in Riyadh. The Saudi government recalled its ambassador to Berlin in protest over the  comments. Mrs Merkel would welcome the revival of the right/left combination as a guarantee of stability.

“We have a very difficult situation,” SPD parliamentary chairwoman Andrea Nahles said. “Merkel doesn’t have the power to build a new government.”

Another potential partner is the pro-market Free Democratic Party, which walked out of coalition talks with Merkel’s Christian Democrat-led bloc and the Green party on Sunday.

Twelve years into her chancellorship, Merkel’s former partners are wary of another deal with a politician with a spider-like ability to kill her partners in government.

Both the SPD and the Liberals emerged from previous alliances bruised or broken.

Waiting in the wings is the Alternative for Germany far-right party, which leveraged discontent in the wake of the 2015 refugee crisis to emerge from the September election as the country’s third largest parliamentary force. Polls show it would improve its position in a new election.