While most of the recent market attention has been on the political situation in Italy, the political environment in Germany has been bubbling over. The historic alliance between the German CDU party (of Chancellor Merkel) and the Bavarian CSU party has become strained to the point of breaking over diverging views on migration policy.
CSU Breaking Rank
Merkel who came under attack for opening German borders in 2015 has now come under fire from within her own ranks. German interior minister Seehofer, chairman of the CSU, wants to implement a new law which would allow Germany to turn away any migrants already registered safe in another European country with a view to reducing the social and economic burden on Germany. However, Chancellor Merkel and the CDU are pursuing an agreement at EU level.
The CSU has now taken things a step further and presented Chancellor Merkel with a two week deadline to rework Europe’s rules on migration or risk forfeiting the alliance with the CSU party. Merkel is therefore working towards agreeing a Pan-European solution at the EU summit on June 28th – 29th where European leaders will meet to discuss several key topics, including migration policy.
Euro Summit To Prove Difficult
Among the leaders expect to oppose any solution is Italian Prime Minister Conte who will likely block the Dublin regulation which says migrants should apply for asylum in the country of their arrival to the EU. Given that many migrants have been reaching Italy by boat, the country tends to be the first stop for many migrants coming to the EU.
Italy has come under fire recently from other leaders such as French President Macron for turning away such boats and putting the migrants live sin further danger. Alongside this e are likely to see CEE countries rejecting proposals for EU fund reallocation which would see a heavy cut in funds to CEE countries in exchange for an increase in funding for countries such as Italy, Portugal, Greece and Spain. As such, this is likely to make it very difficult for any Pan-European agreements to be reached.
July 1st Deadline
The CDU and CSU have agreed July 1st as the deadline for resolving the issue. However, migration policy negotiations at the EU summit are likely to be extremely difficult and as such there is a strong risk that Merkel will fail to agree a Pan-European solution to the issue. If Merkel fails to agree a deal at the summit the July 1st deadline is highly likely to pass with no solution and in such a case, CSU Chairman Seehoffer has reaffirmed his intention to instruct German police to turn away migrants at the German border.
Regional Elections Motivating CSU
The CSU’s stance on migration is likely highly motivated by the upcoming regional elections in October in Bavaria. As the CSU is mainly competing with the far-right AfD for votes, it needs to be seen to be taking a firm stance on migration in order to maintain the support of the electorate there. As support for Merkel has declines sharply since 2015 specifically in relation to her migration policy, such as move could help the CSU maintain its position in Bavaria by distancing itself from Merkel.
A recent online poll in Germany revealed that 70% of voters in Bavaria would back the CSU’s decision to abandon the alliance with the CDU and leave the grand coalition. The breakup of the coalition would leave the CDU and SPD two seats short of a parliamentary majority which would trigger a fresh political crisis in Germany.