Germany: Merkel’s Approaching Endgame

Published on June 15, 2018

With stakes for Germany and for the European Union that could not be higher, the fate of German Chancellor Angela Merkel will be decided by early next week.

A few quick points going into this weekend:

** Interior Minister and Christian Social Union leader Horst Seehofer is likely to win the support of the CSU rank and file in a special party meeting on Monday to proceed with his unfortunately named “Master Plan” to sharply crack down ‎on immigration into Germany, including a refusal to allow entry by migrants who have already applied for asylum in other EU countries.

** We doubt he will, but as Interior Minister, Seehofer has threatened to proceed with a ministerial decree, in response to which Merkel would almost certainly sack him. That would, in turn, all but ensure a full rupture between Merkel’s Christian Democrats and the CSU, and very likely trigger a collapse of her government.

** More likely, however, is a compromise in which Seehofer wins CSU support for his defiant showdown with Merkel, but with implementation delayed until after Chancellor Merkel goes to Brussels for the European Summit meeting on June 28 and 29, where she has promised to “do the utmost” to reach “bilateral agreements” with” the most relevant EU member states.” Seehofer’s move may in fact give Merkel some tailwind in those negotiations. But maybe not enough.

** If Merkel fails to win enough concessions in Brussels, she may be forced to return to Berlin to call for a vote of confidence for what she did bring home, which may be her last play left, since a majority of Bundestag deputies are probably fearful of losing their seats in a new federal election. But a loss of the confidence vote would mean asking German President Frank Walter Steinmeier to dissolve the Bundestag.

** But even success on a Monday compromise with the CSU or another in Brussels still would not mean an end to the German political crisis: Merkel still needs the backing of her junior coalition partner, the Social Democrats, who could still reject the compromise carved with the CSU and in Brussels; that too would almost certainly lead to a serious crisis, if not collapse of the Merkel-led government.

‎** We think a vote of no confidence — Merkel herself cannot resign per se but only leave office through a so-called “constructive” vote of no confidence on behalf of a challenger — is more likely than snap elections. In a lost confidence vote, President Steinmeier would be likely to grant the CDU as the largest party another shot at forming a new government before resorting to calling for new elections.

** The role of Bundestag President Wolfgang Schaeuble then becomes pivotal. Schaeuble gave a rousing speech on Thursday to rally the CDU to Merkel’s side after the failure of a four person, near three-hour negotiation between Merkel and Seehofer. Schaeubale would never openly defy Merkel, though interestingly, TagesSpiegel, an influential newspaper in which his daughter is a chief editorial writer, has been consistently taking a highly critical line against Merkel.

** It is our understanding Schaeuble is positioning himself to step into the breach to replace Merkel as CDU party leader if she resigns or loses a vote of confidence, and to lead negotiations to form a CDU/CSU minority governing coalition with the Free Democrats, which under its leader, Christian Lindner, has shifted to the right and aligned with the CDU right faction led by Health Minister Jens Spahn and the CSU’s Bavarian Prime minister Martin Soeder, who is the power behind Seehofer.

** The threat for the CSU to join an “Axis of the Willing” with Austria and Italy that so bizarrely invoked not only the Nazi alliance with Italy in the Second World War but President Bush’s invasion of Iraq has added an almost surreal quality to the political crisis. But we have in fact been warning ever since the elections last September how fragile Chancellor Merkel’s government was going to be due to the strains to her right with the Christian Social Union and a minority faction within her own Christian Democrats (see SGH 1/19/18, “Germany: Beyond Sunday’s Vote” and SGH 11/16/18, “Germany: Merkel’s Last Play”).

** That now seems to be playing out, though we are nevertheless a little surprised how quickly Seehofer’s gambit over the immigration issue has escalated into a political crisis.

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