Following the breakdown of the Jamaica talks, Germany is now entering political terra incognita. The former still-acting government can be expected to remain in office for longer than has ever been the case in previous elections. Legally, Chancellor Merkel and her cabinet still have full capacity to act. However, it is considered political etiquette not to make any decisions that a new government might not be able to make itself at a later date. For this reason, key reform and investment initiatives, such as the long-overdue expansion of digital infrastructure, have been shelved for the moment.
Whether Chancellor Merkel uses her proxy at European level will become clear at the next EU summit due to take place in December. Following the regular meeting of the European Council, the heads of state and government are due to convene to discuss the reform / extension of the Eurozone. The discussions will most likely focus on the ideas already outlined by the French President Macron. Given the election campaign and subsequent exploratory discussions between the parties, Germany is neither able to come up with a well-honed concept of its own, nor would there be any political support for this in Berlin at the moment. Formally, the European Council would still constitute a forum if Germany were to abstain from voting – even in the case of votes requiring unanimous consent.
This means that the European Council could still set a political course in December, even without Germany. It is doubtful, however, whether it would be politically clever to make far-reaching strategic decisions without the consent of the largest member state. Another problematic issue is that the Union parties in Berlin will not yet be able today to foresee whether they will work together in the end with the Greens or the SPD in a formal or unofficial alliance or whether an alliance might be formed after all with the FDP after possible new elections. However, as the exploratory talks have shown once again, the European policy goals of the potential alliance partners diverge greatly. If Merkel were to address the demands of the EU partners for an intensification of the transfer union, or if she were to at least tacitly condone them, the Liberals might regard this as a provocation. In the already complicated situation, the Chancellor would be robbing herself of a power option and would thus make herself completely reliant on the goodwill of the Greens or the SPD. The political price would probably be high, particularly for the CSU which must face the electoral vote in Bavaria next year.
Given the dilemma facing Merkel, Germany is likely to recommend that no resolutions are approved by the EU that might not be still corrected one way or another. For Europe, the squabbling over the formation of a government in Berlin is coming at an inopportune moment. Given the gridlocked Brexit talks, the elections approaching in Italy and the general uncertainty over the future of monetary union, the EU runs the risk of losing more time – time that it no longer has, even today.