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November 2017
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Germany after Elections – Implications for the UK and Brexit negotiations

A month after Germany took to the polls on September 24th, initial coalition talks to form a new government began last week. Although Angela Merkel and her conservative CDU/CSU group won the elections, they entered Parliament a weakened force after suffering severe losses. Although sure to be re-elected as Chancellor, Merkel is left with only one feasible power option: a ‘Jamaica’ coalition of CDU/CSU, which would house major differences on several issues.

Bernd Buschhausen, Policy Expert and Partner at Instinctif Partners in Berlin, comments on the election result and its meaning for the UK and Brexit negotiations.

1) Where is Germany heading, and will it still be outward looking?

Bernd: Germany is and will remain an export driven nation, outward looking by nature. However, those who have high hopes of German leadership in European and global policy making are likely to be disappointed. With fading political appeal, Merkel emerges from the elections weaker than anticipated. Not only is she under criticism within her own party but externally she will have to appease many different party positions. These circumstances stretch and ultimately limit her ability to push through important initiatives both at EU and national level.

 2) What does Merkel’s weakened stance mean for Brexit negotiations?

Bernd: Many Brexit hardliners followed the German election with interest. A weakened chancellor Merkel, they reasoned, might be more inclined to make compromises during Brexit negotiations. Yet, while Merkel’s post-election position today is indeed weaker, Brexiteers may be disappointed. Brexit did not play a role during the German election campaign, and Merkel’s weakened stance will not fundamentally change the German position on Brexit. There will not be negotiations on a future trade deal unless the issues of the divorce bill, EU citizens’ rights and the border question between Ireland and Northern Ireland are settled.

What Merkel’s weakened position does mean however is that domestic issues will drive her agenda in the coming months. Merkel’s heavy losses in Parliament mean there is no longer a clear one-party-mandate and make the direction of the next government unclear. The next four years of government will not be about visions along party-values but about managing change.

3) What are the positions of the Jamaica coalition parties in terms of Brexit?

Bernd Buschhausen is an award-winning policy expert at Instinctif Partners

Bernd: All parties in the ‘Jamaica’ coalition question are convinced pro-Europeans. Where they differ is in policy areas on which the EU should focus. The CDU emphasizes that a strong EU is a precondition for a strong Germany. Regarding Brexit, Merkel supports fair and swift negotiations that guarantee a good EU-UK relation in the future.

The CSU often criticises a rampant bureaucracy and too much centralisation of the EU. As a regional party from Bavaria, given the region’s close economic ties to the UK, the CSU seeks to limit negative impacts of Brexit by reaching a new trade agreement as soon as possible.

While considering themselves pro-European, the Liberals (FDP) criticise the EU as distanced from the citizens, especially in terms of bureaucracy and centralisation. When it comes to Brexit, the FDP is pragmatic – while against a “Brexit à la carte”, the UK should not be ‘punished’ for Brexit and should stay a key ally and an important trading partner.

Of the potential allies, the Greens are perhaps the most EU-friendly and embrace Macron’s broad visions for the Union, advocating a deeper monetary union and the creation of a “European Future Fund”. On Brexit, the Greens support a rather tough stance towards the UK. Leading Green politicians often mention that the interests of EU citizens must precede a new free trade agreement between the EU and the UK.

4) What implications would a Jamaica coalition have on Brexit negotiations? 

Bernd: For Germany, the EU is more than a common market. It is an integral part of our national identity. We even have an article on a united Europe in our constitution, the Fundamental Law. In line with this tradition, all parties about to form the Jamaica-coalition want to ensure that the EU remains a success. It is in Germany’s core interest to revitalize the European project – especially in the aftermath of the Brexit vote. The new German government will therefore concentrate on common ground among the remaining EU partners to move forward, aiming to make EU-decision-making faster, more transparent, more effective and more people-oriented.

While the UK is and will be an important partner for the EU in general and Germany in particular, the priority for European leaders will be on shaping the future of the EU and not on divorcing the UK. It is unlikely – if not out of the question – that the new German government will jeopardise the pan-European project in exchange for a good trade will with the UK. There will be no cherry-picking, where the UK benefits from a privileged access to the European market without adhering to the obligations. The four freedoms of the EU are set in stone.

Interestingly, German businesses are backing German politicians in this regard. The German Business Association BDI has repeatedly stated support for the EU’s Brexit negotiation strategy. Its president publicly called upon policy-makers in Brussels and Berlin to make sure the EU stands together and is strengthened. Although German industry favours clear new rules between the EU and the UK, safeguarding the single market and galvanising the EU is the priority.

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