A No Deal in Brexit negotiations could prove fatal for Angela Merkel as German Chancellor and Leader of CDU, after the battering suffered by CSU in Bavaria. Why? German Car Exports are vital for Germany's economy. CDU's leadership election by the end of this year will be the next thing to follow to know if Angela Merkel would still be German Chancellor by March 2019 when UK is due to leave the European Union. With the issue of Immigration as hot potato that is seriously damaging relations between EU countries, adding financial uncertainty at a time when German taxpayers will have to be asked to pay more to replace the monies provided by the United Kingdom to the EU is not the best move. Having said that, what would then be Germany's choices?
Considerations about the political future of Angela Merkel and of the ruling coalition are on the horizon. After performing very badly in a Federal Election, Angela Merkel firstly tried to form a coalition with FDP and Grünen. When this failed to produce a viable coalition, Angela Merkel reached out to try and persuade SPD to come on board. Looking at results in Bavaria, both CSU and SPD lost badly and Grünen was one of the winners.
Now, this is the political map. CDU is in coalition with CSU and SPD (both losers in Bavaria's election) and CSU could be forced to form a coalition with Grünen in Bavaria. What kind of policies can come out of such political mix?
More than ever before, Angela Merkel needs a deal to protect the German Car Industry to keep the German economy on track to be able to increase its financial support for the European Union. Factor 1: Germany needs whatever financial contribution it can get from a successful deal with the United Kingdom. Factor 2: Germany needs to make sure that its German Car Exports are not dramatically affected. There are reports indicating that Germany could lose up to 57% of its Car Exports.
Whatever happens elsewhere in the European Union, Germany is the country to look at. Germany was a key country to form the Common Market, later called European Community and now called European Union. If Germany falters, the entire project would be in danger.
There are many pieces of the EU puzzle. France is another key piece and President Macron is nowadays of the most unpopular Presidents in the history of France. His approval levels have fallen dramatically. Italy is at odds with EU. On the one hand, Italy desperately needs to spend to maintain some kind of economic stability and avoid a political meltdown but its budget needs to be approved by an EU that doesn't like big deficits. No one would have enough resources to salvage both the French economy and the Italian economy while other minor players like Greece are themselves in dire straights.
The EU desperately needs trade to stay afloat. Much of the "intransigent approach of the European Union" is based not on real strength but on fear. The European Union is big but very slow. There are far too many differences and inconsistencies between European Union countries.
A good Brexit Deal benefits all parties. A No Deal could simply accelerate the process of disintegration of the European Union.
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