Sunday

22nd Jul 2018

Merkel's woes cast shadow on EU's future

  • 'The weakening of Angela Merkel and the possibility of a real crisis worries everyone,' said a top EU official. (Photo: Consilium)

Three days have passed since a Franco-German agreement in favour of a eurozone budget triggered hopes for a relaunch of EU reforms, and already the mood is already souring over fears of a political crisis in Berlin.

"It's the elephant in the room," a top European source said on Friday (22 June).


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"The weakening of Angela Merkel and the possibility of a real crisis worries everyone," he said. Together with the situation in Italy, "it is in the background of all discussions" within the EU.

In Luxembourg, where the French and German finance ministers presented the common proposal for a eurozone budget, a European unemployment stabilisation fund, and instruments to help countries in crisis, the reactions were not all positive.

"When it comes to fiscal capacity, I didn't say for nothing that I do not see which issue this will solve," said Dutch finance minister Wopke Hoekstra.

The Netherlands is the "most hostile country," a French official noted, admitting that there were "very strong oppositions to the budget idea."

According to the Financial Times, Hoekstra even sent a letter to the Eurogroup chairman Mario Centeno, in the name of 12 sceptical countries, to oppose the budget idea.

But in a context of other uncertainties, in Europe and globally, the official insisted that the possibility of a new economic crisis was real and that status quo in the eurozone would be "irresponsible"

"France's determination to push for a eurozone budget is total," the source said.



But for Paris, and other supporters of the budget and other reforms, Merkel's capacity to convince her own government coalition with the CSU, the Bavarian branch of her Christian Democrats party, plus the Social Democrats has become a concern.

"The anxiety is there," the French official noted, adding that his government waited "with concern" the reactions in Berlin over the deal to close the Greek bailout agreed during the night from Thursday to Friday.

Depleted capital?

"Merkel put all her political capacity on solving migration," pointed out Nicolai von Ondarza, from the German Institute for International and Security Affairs.

"The question is whether she has enough political capital left to, at the same time, convince her own party to also move on the eurozone," he added, noting that "some in the CSU want to open a second front" against the chancellor.

Nicolai von Ondarza noted that a year and a half after the election of Emmanuel Macron in France, Merkel's woes have made the Franco-German relationship "more symmetric".

But the prospect of Macron taking the upper hand is not yet reassuring other European leaders.

'Survivor'

"The chancellor is excellent in maintaining the balance in Europe. It is difficult to imagine anyone else who would be capable of that," a top European diplomat told EUobserver.

The French official, for his part, argued that France was now "the only [EU] country that is stable, politically strong and clear on its positions," but he admitted that "no country wants to be left face-to-face with France or France and Germany."

On Sunday, at a controversial migration mini-summit organised by the European Commission, and next week at a regular EU summit, Merkel will try to find a solution on migration and save her leadership at home.

In Brussels, "it's business as usual," an EU source told this website referring to the preparatory work for the summit.

"There is always a country with a coalition and this kind of domestic difficulties," the source said, noting however that a German government led by one of Merkel's political foes would make things more difficult for the EU.


Ultimately, a prolonged weakening of Merkel is seen as more likely than a sudden fall of Merkel.

"We'll see after Sunday," the diplomat said. "But I don't think it will lead to the end of her term. She survived many things already."

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