While the international, that is the English-language, media, pursues its obsessive interest in President Trump, and the British press focuses on the minutiae of the Brexit negotiations, an event which occurred in Berlin this weekend is arguably the most important foreign news development in the last six months. On the 19^th November, the talks aimed at forming a new German coalition government collapsed; the Free Democratic Party walking out of talks with the Christian Democrats (CDU)/ Christian Social Union (CSU) and the Green Party.

There appear to have been two areas of disagreement, the first was on refugee policy, how many additional refugees to allow into Germany, and the second point of contention appears to have been demands that Germany honours its commitment to move towards renewable energy, by closing its polluting coal fired power plants. As Der Spiegel said recently, “the urgent need to prepare the next step toward complete reliance on renewable energy – which Merkel made national policy in 2011 – appears to be going largely ignored. That step is the closure of the country’s coal-fired power plants.” At the COP 23 talks in Bonn in November, Angela Merkel refused to give any commitment on the phasing out German coal power plants, which generate over 40% of German electricity, much of it from lignite, particularly polluting fuel. Refugee policy has been equally contentious, given Merkel’s admission of over 1 million immigrants in 2015, many of whom were economic migrants, not refugees from Syria. The anti-immigrant Alternative for Germany Party (AfD) is now the third largest political party in Germany and is strongly opposed to allowing further immigration. Although Angela Merkel has continued talks aiming at forming a minority government, there is a strong likelihood that new elections will have to be called in Germany within the next few months. If this happens, it is likely to mark the end of Merkel’s Chancellorship and of her influence in Germany and in the European Union, which she has dominated for many years. Even if she is successful in forming a minority government, it will be seriously weakened, and will be unable to pursue many of the policies that have been supported by the German government over the last few years.

A minority German government will be badly placed to manage the next Euro crisis, and will be unable to act in a decisive manner over the Brexit negotiations with the United Kingdom. Because Germany is the dominant power in the Eurozone, and the strongest economy in the European Union, its influence has been decisive in dealing with disputes and crises within the EU; a weakened Germany is unlikely to be able to play such a role, but it will not permit France, or any other country, to assume a position of dominance. German failures in dealing effectively with immigration, and with climate change, are indications of serious policy failures, for which Angela Merkel must take responsibility. Germany has other problems, which are not necessarily obvious to the other European Union states, its infrastructure is ageing, badly in need of repair and replacement, it’s excessive export surplus, has been achieved at the expense of weaker southern Mediterranean EU members, and it has developed the most unequal society in Europe. The problems of the German motor industry, illustrate the lack of preparedness in the wider German economy. The diesel scandal, which showed that German companies were prepared to mislead and even lie, in order to avoid realistic testing of the performance of their vehicles, showed an arrogance and lack of integrity at the heart of German industry. German critics of the motor industry, including Deutsche Umwelthilfe, have accused the KBA motor vehicle authority of having an intimate relationship with the motor industry.

Germany also appears to have ignored the rise of electric vehicles, only in the last few months have German companies made announcements about their commitment to producing electric vehicles, while Tesla and other Japanese and American companies are many years ahead of them. It is also interesting that the German government has not followed the policies of France and Britain in announcing that fossil fuel cars will not be able to be sold after 2040.

The failure of the German political classes to effectively govern their own country, while preserving their dominant position in the European Union, has gravely weakened Europe, and in part this accounts for the poor economic performance of the Eurozone from 2000. In hindsight, Mrs Merkel’s reign as Chancellor, will be seen as a time of lost opportunities, a time when Germany failed to use its wealth and resources to adequately prepare for the emergent economy. The German population has been in decline for a number of years, and a balanced programme of immigration, would have greatly benefited the country, but as a result of the massive miscalculations in 2015, immigration has become a failed policy, as far as majority of Germans are concerned.

In this climate, it may be impossible for the British to secure a reasonable divorce agreement from the European Union, this will not be a disaster for the British, but will require long negotiations in future years over trade, because Britain is an important market for Germany and France, one which they cannot afford to lose. By the same token, when the next Euro crisis emerges, as it will, in Greece, or in Italy, or in Spain, indecisiveness and weakness in the German government will make it increasingly difficult to manage.

I therefore believe, that the failure of these talks in Germany, will have serious ramifications across Europe, as a weakened and indecisive Germany will be unable to exercise its power over European institutions effectively, to the detriment of the members of the European Union.

Note: 2nd December 2017

Since this article was originally written Mrs Merkel has attempted to form a new coalition with the support of the Social Democrat party (SPD), but it is far from certain whether this will succeed, although there is immense pressure on her. Germany’s President Frank-Walter Steinmeier is hosting the talks at his official residence, the Bellevue Palace, but there is a strong group within the SPD opposed to any coalition with Merkel. The situation is further complicated by an attempted coup against Horst Seehofer, who leads the Christian Social Union (CSU), the Bavarian partner of the CDU. Talks are due to take place with the SPD, but there is no prospect of any agreement (if at all) for several weeks.

If, and it is by no means certain, that some form of coalition is put together it is likely to be weak and may well lose critical votes in the German Bundestag. The possible outcome is that there will be another German election in 2018 which may well see Merkel leave political life and minority parties, like the AfD, gain seats at the expense of more established parties like the SPD, Free Democrats and the CSU/CDU. In such an event German politics would be weakened, and the threat of a right-wing or left-wing government would act as a challenge to the establishment parties, one which they are ill-equipped to deal with. In any event it appears that German politics are entering an era of uncertainty, with no dominant political party. As a result Germany will be ill-equipped to make critical decisions during the next Euro crisis, or to deal effectively with climate change, the realignment of the German economy, or migration.

Andrew Palmer © 2017, please do not reproduce without permission.