Angela Merkel faces latest challenge at EU summit

Angela Merkel is heading to a European summit this week that could end up defining her legacy, just nine months before leaving politics, and Germany and Europe are entering the post-Merkel era.

This is the last summit of Germany’s six-month presidency of the EU, a time of unprecedented challenges for the 27-member bloc. The coronavirus pandemic plunged her into the worst economic crisis in its history, discussions on Brexit went over and a row on the rule of law has caused a damaging division between Hungary and Poland and the 25 other EU Member States.

Dispute threatens one of the EU’s singular achievements – a € 1.8 billion deal on its next seven year budget and a huge Covid-19 recovery fund, financed by debt raised in financial markets by the European Commission and designed to help struggling economies emerge from the crisis.

“This was to be the main legacy of the German presidency and, perhaps, the height of Merkel’s time as chancellor – and now it hangs by a thread,” said Jana Puglierin, chief. of the Berlin office of the European Council on Foreign Relations.

Hungary and Poland’s objections relate to a key provision linking the release of EU funds to respect for the rule of law. Their response – threatening a veto over the entire budget deal – threw the gauntlet at all other member states. But for Merkel, it was especially painful – a rejection of all she stands for.

“Merkel patiently and stubbornly seeks compromises,” said Josef Janning of the German Council on Foreign Relations. “But you can’t do that when a Member State threatens a veto. It just ripped the rug out from under her feet.

The shockwaves of a potential veto would be far reaching. Leaders hoped to use this week’s summit to strike a major deal on EU emissions targets, with member states forecasting a 55% reduction by 2030. But those plans depend on the availability of funds to help finance the transition to a low carbon future. So without a deal on the budget – known as the MFF or multi-year financial framework – and stimulus funds, diplomats warn, the climate discussion risks derailing.

“I don’t agree with the CFP. . . endangers reaching the very, very urgent and necessary conclusions on the climate, ”said one of them.

Then there are the ongoing Brexit talks. If the UK and the EU fail to come to an agreement on their future relationship in the coming days, the potential chaos associated with a no-deal outcome could spread to the summit as well.

Officials have worked behind the scenes to find a compromise between the two sides in the rule of law dispute. This would add reassuring language aimed at allaying fears in Poland and Hungary that they would be unfairly targeted by the rule of law mechanism.

But at the same time the committee worked on fallback options that would allow the 25 Member States supporting the create the stimulus fund themselves, cutting off Poland and Hungary.

However, it flies in the face of everything Ms Merkel believes in. His mantra has always been to “keep everyone on board”, as his officials say, and continue to negotiate until a mutually acceptable solution begins to emerge. The idea of ​​a new EU instrument from which some EU members are excluded is deeply hostile to it.

Some say she doesn’t have a lot of choice. “Merkel just has to resist [Hungarian prime minister Viktor] Orban and [leader of Poland’s Law and Justice party Jarosław] Kaczyński, ”Ms. Puglierin said. “If not, it will damage his credibility.”

Opposition members say she should have stood up to them a long time ago. “When you compromise for too long with the populists, they push you so far that in the end you are right up against the wall,” said Franziska Brantner, German Greens spokesperson for Europe.

The German EU Presidency was not supposed to end with such a dispute. There were high hopes that Merkel’s skillful management would put the EU firmly on the road to recovery.

Some think it was still unrealistic. “Expectations were a bit high,” said Manfred Weber, group leader of the center-right European People’s Party in the European Parliament. “Everyone said – this is Merkel, she will solve all of Europe’s problems. But it was clear from the start that it would be difficult to achieve.

Ms Merkel herself had great ambitions for the presidency. She wanted to start a discussion on the future of the EU, advance green and digital agendas and start stalled talks on reforming the EU migration system.

Yet progress has been halted. Merkel’s hopes that the EU can finally clarify its relations with China “have not gone very far,” Weber admitted, with the pandemic forcing the cancellation of an EU-China summit to be held. in Leipzig in September. The virus, which made it nearly impossible for the working groups to meet physically, “put enormous pressure” on the German presidency, Weber said.

We still hope that compromises can be found. Still, diplomats fear the German presidency could end in failure – by making a Brexit trade deal and getting the stimulus fund off the ground. This could seriously damage Ms Merkel’s reputation just months before the Bundestag elections which will mark the end of her 16 years in power.

“It would be proof that his time is up,” Janning said. “It would show that his magic powder no longer works.”