JSE closes weaker as elusive Merkel coalition deal rattles global markets

Posted July 04, 2018

German Chancellor Angela Merkel struck a deal on immigration, which had threatened to break up her coalition only four months into her new term, agreeing to build transit camps for refugees attempting to cross into Germany from Austria. Apparently, the Christian Democratic Union (CDU) is unwilling to accommodate these needs of the CSU.

The conflict between Angela Merkel and her Interior Minister Horst Seehofer is so severe that either she loses face or they both lose their jobs and Germany is without a chancellor, political scientist Werner J. Patzelt told RT.

In such a circumstance, Merkel would no longer have a parliamentary majority, and consequently, there would be new elections, Patzelt explains.

But soon after, Seehofer said he would hold last-ditch talks with Merkel's CDU "in hopes of reaching an understanding". In controlling Germany's southern border to a greater degree than it has been recently, Germany will establish transit zones where migrants will be screened and those who have already applied to asylum elsewhere in Europe sent there - a move upholding the word of European law as laid out in the so-called Dublin regulations.

That decision convulsed European politics, fueling the rise of anti-immigration parties including the far-right Alternative for Germany (AfD) party, which now threatens to unseat the CSU in October's regional elections.

Following marathon talks at the Brussels summer summit, European leaders eventually reached a compromise on migration in the early hours of Friday.

Without Monday night's compromise, Mr. Seehofer would have been fired or would have resigned, which could have brought down the government if his party then withdrew from the coalition.

However, according to das Bild, Seehofer called the meeting on Saturday evening an "ineffective conversation".

CSU officials on Monday gave no indication they were rethinking this position and continued to argue for tighter border controls and denying entry to some asylum seekers.

In high-stakes crisis talks on Monday, Ms. Merkel put to rest for now a risky row with a longtime rival, Interior Minister Horst Seehofer, that had threatened the survival of her shaky 100-day-old coalition.

But it was Seehofer's latest project that shattered relations with Merkel, a 63-point "migration master plan" that is yet to be released to the public.

Ms. Merkel, anxious about European Union unity, opposes such a unilateral move without agreements between Germany and its neighbors. Its leader, Andrea Nahles, said the party will closely examine the agreement.

Merkel has survived a populist wave that has swept through Europe longer than most German leaders, but the wave has now left her grip on the country vulnerable.

If the Juncker-approved German deal goes ahead and Austria follows suit that is likely to prompt an even harder line on migration in Italy, which already begun refusing to take in migrant boats under its new government.