Will a Merkel win this weekend be good or bad for Brexit?

Will a Merkel win this weekend be good or bad for Brexit?

Back in March, I was worried that the German election would adversely affect the Brexit negotiations. Martin Schulz had been elected leader of the Social Democrats with an unprecedented 100 per cent support. Journalists and pundits became excited at the prospect of a competitive election in September, and within weeks the SPD had gained 10 per cent in the polls, inching ahead of the CDU.

Was there a “Schulz effect” that could unseat Merkel and bring the SPD back into power? Could the arch-federalist, former President of the European Parliament, who had carved out his career in Brussels rather than Berlin, become the lead negotiator in the Brexit negotiations? Was the UK in line for a “punishment beating”, as Boris Johnson had warned us, “in the manner of some World War Two movie”?

Thankfully, the “Schulz effect” was short-lived, lacking the substance to sustain momentum. So, unless the opinion polls are epically incorrect, the answer to these questions seems likely to be a firm ‘Nein’. Merkel’s Christian Democrats are roughly 15 per cent ahead of Schulz’s SPD, so ‘Mutti’ will remain at the helm for a historic fourth term as Chancellor.

So does this mean ‘no change’ in EU policy? Not necessarily. It depends on the coalition she manages to assemble after the election. Her preferred option will be to govern alongside the liberal, free market Free Democrats (FDP), rather than continue the current ‘grand coalition’ with the SPD; but she might also need to bring the Green Party on-side to secure a working majority in the Bundestag.

But before analysing what a ‘Black-Yellow’ (CDU-FDP) coalition might mean for Brexit, it is worth emphasising that all German parties see the EU as being in Germany’s core national interest, and see the EU’s cohesion and stability as being are incredibly important. Their attitude towards Brexit tends to be that the EU should try to maintain a good relationship with the UK but it should not make any compromises on its core principles.

That said, two factors could assist the Brexit negotiations. As the unofficial leader of the free world, a key task for Merkel in her fourth term will be sorting out the future architecture of Europe, both in terms of the EU’s relationship with Britain and also the future of the EU itself (President Juncker’s ‘State of the Union’ address was particularly interesting in this regard). Asked about Brexit over the summer, Merkel apparently told a senior member of the Austrian Government that “the grown-ups will take over the talks from October”, so we could start to see more movement once she has formed her coalition and her fourth term is secure.

The second factor which could assist the UK is the fact that the Free Democrats tend to be more sympathetic to Britain than other parties in Germany. Their leader, Christian Lindner, has said that they would call for an amicable compromise in the Brexit talks, and he has also made it clear that he does not support President Macron’s proposals for greater Eurozone integration and a common Eurozone budget, stressing the need for fiscal discipline.

That said, don’t expect a big change of approach from Germany. At the end of the day, Merkel understands that the success of the UK and the EU are interlinked, both politically and economically, and her pragmatism will prevail. But not having a Chancellor Schulz should be considered a bullet dodged.

In his capacity as a Senior Fellow at the Legatum Institute, Matthew co-authored, with Claudia Chwalisz, A brief guide to the German election: Merkel’s coalition crossroads