The rebalance of power among German political parties means hopes of German sensibility coming to our aid during the Brexit process may be wishful thinking, says Alex Fiuza.

Germany was thrown into political limbo last week by the collapse of talks between Merkel's Christian Democratic Union, the left-wing Greens and the liberal FDP, the so called 'Jamaica coalition'. This collapse was brought on by FDP leader Christian Lindner's refusal to accept the major compromises it would have to make, announcing 'it is better not to govern than to govern badly'. Since the FDP's supine performance in their last coalition with Merkel cost them two-thirds of their vote, Lindner's defiance may well prove pragmatic for his party. Merkel, meanwhile, has ruled out forming a minority government and now seeks a renewed grand coalition with Martin Schulz' leftist SPD.

Although Schulz initially ruled out a coalition with the CDU, events and ambition seem to have changed his mind. Coalition talks began on Thursday, though as yet remain inconclusive. The SPD set out a remarkably doctrinaire series of demands, including ensuring no limits on migrants coming into Germany, no restrictions to family reunifications of migrants already in Germany, the nationalisation of private health insurers and higher taxes on the successful. Will their ambition cause the CDU or their more conservative Bavarian partners, the Catholic Social Union, to chafe?

Perhaps not. Despite the CSU's dramatic loss of votes to the right-wing Alternative for Deutschland in Bavaria, and the upcoming Bavarian state elections, CSU leader Horst Seehofer has endorsed a new grand coalition as 'the best option for Germany'. Within the CDU, meanwhile, Angela Merkel has fastidiously ensured there are no alternative power centres to her, and she herself has form for giving the left what they want.

If the talks nonetheless fail, Merkel can either break her word on not forming a minority government, or push for fresh elections. The current German polls show little movement, however, and the campaign may well favour the AfD, who have proven slick campaigners, the FDP and the Greens, who both left the Jamaica talks having strengthened their respective positions. In other words, snap elections are no guarantee of a solution, and a second inconclusive result would make Merkel's position very tenuous indeed!

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Should a grand coalition emerge, however, it is unlikely to serve either participant. The AfD would become the national opposition, further entrenching them as a serious force in German politics. Likely policies pursued by the Grand Coalition would also prove to the benefit of the AfD, and perhaps the FDP, bolstered by Lindner's scepticism of the German consensus.

These policies include worsening the migration crisis with unlimited family reunifications for migrants. They include Merkel's disastrous Energiewende, her green energy policies which since the closure of nuclear plants in 2011 have seen German average household energy bills rise by over £205 to £1843 in 2014 (compared to £1344 in the UK). As the Energiewende closes coal mines and plants in Germany, prevents domestic fracking and leads inevitably to importing more oil and gas from Russia and the Middle East, this will bite the German Government harder.

CDU and SPD Europhiles potentially joining Macron's push towards a European system of fiscal transfers would also prove unpopular.  Higher taxes on the successful will strengthen the FDP among aspirational urbanites, while continued payments of the so-called 'Turkgeld' to an increasingly repressive Turkish Government may send internationalists from the SPD to the Greens.

It isn't the case that the German electorate would just forgive and forget such policies over an electoral cycle, either. The SPD never recovered from Chancellor Schroder's decision to abandon traditional citizenship rules in a sop to migrants; German voters have long memories. As bad as this election was for both parties, it can always get worse.

What will this mean for Britain? On the face of it, Merkel allying with a headbanging Europhile like Schulz is likely to prevent her standing up for us across the channel. The truth is Merkel was never going to turn the tables in our favour, however. The idea that she would is typical of the Foreign Office group-think which consistently undervalues the power and importance of the European Commission relative to national capitals. Testament to this is provided by David Cameron's renegotiations. Despite him sweetening Merkel up for years in anticipation, she did not back his extremely modest proposals for a new British relationship within the EU. Should Merkel strike a deal with Schulz, the British Government in turn needs to sober up to the reality that Merkel won't be our Deus Ex Machina, such cold, hard thinking may actually be beneficial to our approach in the ongoing Brexit negotiations.

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