The waning of Germany

Mrs Merkel has been feted and courted as the de facto leader of the EU for the past decade. Mr Obama was a strong believer in the Euro and EU project, and looked to Mrs Merkel to provide its discipline and to be its voice. Mr Cameron decided Mrs Merkel was the main person he had to win over when he sought to renegotiate the UK’s relationship. She did not offer him much, which led to the decisive vote by the UK electorate to leave. It was another of her damaging misjudgements, to go alongside the mistake she made over migration into Germany.

Today Mrs Merkel’s power is visibly waning. The UK now has  a Brexit government. It sees Mrs Merkel as an obstacle when she blocks early resolution of the residency issues, or when she grandstands telling us we have to accept freedom of movement. In the USA President Trump has launched public criticisms of her immigration policy and has said he sees the EU as a “German vehicle”. He speaks up for European countries which want to restore their own identities.  Her voting base is also under attack from the anti Euro anti migrant AFD party.

The diminution of Mrs Merkel’s power is helpful to UK as it seeks to negotiate its future relationship with the EU on leaving. Mr Trump will be aware of the huge size of Germany’s balance of payments surplus, which matches part of the large deficits the USA and UK run up. He wishes to alter this, and is busily seeking to repatriate motor car capacity and investment to the USA given the large stake Germany has in the world car industry.

The German electors will have their say on whether she should continue as Chancellor this autumn. They will also be voting on how big a contribution will Germany provide to the new EU absent its UK paymaster. What is clear is that Mrs Merkel, or any replacement to her, can no longer count on the automatic support of the USA to keep Euro and EU together. Nor can they count on UK cash and support in the Council for lower budgets and better discipline.