Impatient Europe hails German coalition breakthrough

BRUSSELS: European leaders welcomed a breakthrough Friday in German Chancellor Angela Merkel’s bid to form a coalition, hoping it will end months of political paralysis and unblock key EU reforms.
Merkel’s promise to give Europe a “fresh start” was seen as a positive signal to French President Emmanuel Macron’s ambitious proposals for rebooting the bloc after Brexit.
But as the EU awaited the return of its economic and political heavyweight to the political fray, questions remained about whether a new Merkel-led coalition would be strong enough to push through the reforms.
Macron said he was “happy and satisfied” that a coalition deal was in sight, while a French government spokesman said the blueprint was “good for Germany, good for France and above all good for Europe.”
European Commission President Jean-Claude Juncker hailed the German agreement as a “very significant, positive, constructive, forward-looking, purposeful contribution” to the future of the bloc.
Juncker, who heads the EU’s executive arm, has unveiled his own vision for eurozone reforms which differ from Macron’s in that they place more power in the hands of Brussels.
Macron has been eyeing the talks anxiously, hoping to see a government emerge that will swing behind his plans for deepening ties between members of the eurozone as well as the 28-member European Union.
And Europe generally has been in political limbo since September’s inconclusive election in which Merkel failed to win a clear majority, in part due to the rise of the far-right and anti-immigration Alternative for Germany (AfD).
Bulgarian Prime Minister Boyko Borisov — whose country has just taken over the EU’s six-month rotating presidency — urged Berlin to reach a final deal as soon as possible.
“All those topics that we raised depend on cooperation by Chancellor Merkel, on her support in solving the issues. So we are waiting for this quite impatiently,” Borisov said.
The initial signs from the in-principle deal in Berlin were encouraging for Europe.
Merkel said she would “find solutions” with France, while the coalition blueprint includes a pledge to “in close partnership with France, sustainably strengthen and reform the eurozone so that the euro can better withstand global crises.”
Lueder Gerken of the Center for European Study in Freiburg, Germany, said Paris in particular would be pleased.
“The fact that the coalition accord put Europe at the start of the blueprint is an important signal to European partners and particularly to French president Macron,” Gerken said in a commentary.
“A lot of his (Macron’s) ideas are in there.”
Charles Lichfield of the Eurasia Group political risk consultancy said the document was “a basis for discussions with Macron” and “certainly more constructive” than a coalition with the pro-business Free Democrats (FDP) and Greens would have been.
He said it was important that the coalition document mentions a common budget for the eurozone, one of the key proposals by the French president, who was holding talks with Austria’s new chancellor on Friday on the reforms.
Lichfield backed Merkel to get the reforms through.
“One of the reasons Merkel ran for a fourth term was to make sure that a sustainable EU was part of her legacy. So she cares about this deeply and can, I think, still manage divisions in her party enough to get a few small reforms done,” he told AFP.
That was especially true with the support of the SPD, led by the former European Parliament chief and arch federalist Martin Schulz, he added.
“The AfD and the FDP will criticize the direction this is going in, but they don’t have a majority.”
The agreement also mentions bigger German contribution to the EU’s multi-year budget post-2020, a thorny issue as member states try to fill the financial hole left by Britain’s departure in 2019.
Gerken of the CER however warned that this would “pointlessly weaken the German position in the coming negotiations.”