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Merkel’s potential demise would have ‘massive impact’ on Brexit

Posted by: on Nov 22, 2017 | No Comments

I am pleased to have commented for LexisNexis on the latest developments in Germany.Months of negotiations over a coalition government in Germany have collapsed after the free-market liberal Free Democratic Party (FDP) party pulled out of talks with Angela Merkel’s Christian Democratic Union of Germany (CDU) party. The FDP were one of three political parties Merkel is attempting to negotiate with to form a coalition government, following September’s election. Lawyers from Pinsent Masons, Bircham Dyson Bell, and Doughty Street Chambers suggest the lack of a stable government in Germany could have a ‘massive impact’ on Brexit. Legal experts warn that if Merkel is forced to call a new election, her position on Brexit could become a lot tougher in order to counter the further rise of Germany’s right wing Alternative for Deutschland (AfD) party.

FDP leader Christian Lindner said there was ‘no basis of trust’ between his own party, the CDU, its sister party the Christian Social Union (CSU) in Bavaria and the Greens. He added that it was ‘better not to govern than to govern badly’.

CDU deputy chairman Armin Laschet told reporters that Merkel had held a conference call on Monday morning with the party leadership and had retained its support.

Merkel herself has met with German President Frank-Walter Steinmeier, who has the power to call elections, to tell him negotiations had failed.

She could now seek to form a minority government, with either the FDP or the Greens, and attempt to gather support from other parties on individual policies. Or Steinmeier may call a fresh election. However, it is unclear whether the CDU would choose Merkel to lead them to the ballot box a second time around.

Consequences for Brexit

Guy Lougher, partner at Pinsent Masons, says France and Germany are normally at the heart of the EU’s decision-making, often driving the EU’s policy agenda. Therefore, if Germany was unable to fulfil its usual role because of the lack of a consensus Government, Lougher says that risks destabilising the EU at a critical time.

He says it is likely to complicate the UK’s task, in persuading the EU27 and European Parliament that sufficient progress has been made over the three key filter issues:

• the size of the UK’s Brexit bill

• citizens’ rights

• Ireland

Dr Stuart Thomson, head of public affairs, government and infrastructure at Bircham Dyson Bell, notes that Merkel’s domestic issues also provides France’s President Macron with the opportunity to take more control around Brexit. Thomson observes: ‘David Davis’s negotiating may just have become even more complicated.’ LexisNexis

On the other hand, Abigail Bright from Doughty Street Chambers believes Merkel’s unstable position as Chancellor is not going to prove the primary or substantive impact on negotiations. Instead, she believes it is the UK’s lack of concrete proposals which the EU see as the biggest barrier to moving forwards in the next phase of negotiations. Bright says: ‘On 25th September this year, Angela Merkel’s chief of staff, Peter Altmaier, was reported as having said that Brexit talks are an “awful, complicated mess”. Mrs Merkel’s unstable position is a gloss on that reality.’

Changing negotiating positions

Stuart Thomson says there is no doubt Merkel’s position has been further weakened and she could well be distracted by new elections during a period of importance in the Brexit negotiations.

Thomson says: ‘Her position during an election could see her talking a lot tougher about the Brexit process not least to try and stop the further rise of the right-wing populist AfD party.’

However, he suggests that if the German Chamber of Commerce’s calls for a Brexit arrangement that maintains the status quo are listened to then there could be more flexibility for the UK, such as on freedom of movement.

Further delay

Abigail Bright believes ‘further delay’ to the Brexit timetable is the only predictable outcome of Merkel’s difficulties forming a government. Bright maintains ‘Delay works to the UK’s decided disadvantage’.

Bright describes Merkel as ‘a known quality’ in the EU. Merkel has offered various olive branches to the UK, including in July 2016 when Merkel reportedly said that the UK was right to pause before triggering formal Brexit negotiations. The UK press reported that comment as a boost for Theresa May and a paving of the way by Merkel to the timing of the UK’s negotiations.

Bright says: ‘If Merkel’s unstable position entails anything at all for the UK, it is likely to entail more delay and further “froideur” between the UK and seemingly friendly EU member States.’

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