Forget the Budget, Merkel is quitting and this is what it means

YOU could be forgiven for thinking that the big news this week was the UK Budget. Certainly enough of the commentariat gleefully went back to something other than the Brexit process story, but the Chancellor’s fantastical claim the austerity is over did not get quite enough analysis. The fact is, Scotland’s resource block grant is next year going to be almost £2 billion lower in real terms than it was when the Tories first came to power. Austerity might be over for some.

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First published in The National, 2 November 2018

Within hours of the claim the Resolution Foundation worked out that three quarters of the £12bn cuts to social security announced by the UK Government in 2015 will remain in place after the Budget.

The reality is that this Budget is a combination of diversion and ultimatum. A blend of distract from Brexit with a threat to Tory back-benchers that they must vote for the exit deal or the Chancellor will take all the toys away.

However, in amongst the noise I think it is important to note that something far more significant has happened this week that has been given not nearly enough attention: an election in Hesse. On Sunday the Christian Democratic Union of Germany (CDU), won less than 30% of the vote – down from 38.3% in the last election. Combined with disappointing results in Bavaria, it meant that Angela Merkel has announced that she will stand down leader of the CDU. She has been leader for 18 years and has been Chancellor since 2005. Let’s just put that in perspective.

In 2005, Jack McConnell was First Minister, Tony Blair was Prime Minister and Robert Kilroy-Silk was launching a new political party called Veritas for reasons that nobody understood and that now nobody even remembers.

Her departure will undoubtedly have a massive impact on the future of Germany and the rest of the EU at a time when we could use some stability and personal institutional knowledge.

Crucially though, we don’t know when her departure will take place. We don’t know if the person who succeeds Merkel as leader will play along and participate in a gradual hand-over on her terms. Indeed, as of now we also don’t know how her coalition partners, the Social Democrats (SPD) will take the news or whether they will pull out of the coalition government.

What does this change for us? Well, whatever happens by her choosing to stay in place for now, it is unlikely anything will change if the UK leaves the EU in March.

However, purely from a Brexit perspective, even in the longer term it changes very little. She was just one voice among 27, albeit a significant one, and she agreed wholeheartedly with Michel Barnier. Some have always held out dreams that she would come riding to the rescue of Brexit Britain flanked by the German car manufacturers. In reality this was always a fantasy.

There has never been a part of German mainstream politics that sees the EU as either transactional or “pick and mix” as the UK Government and the Brexiteers hope. Therefore, even if she leaves quickly it will make little difference. There is almost unanimity in German politics that the integrity of the EU is their overriding public policy concern, there’s going to be no special deals fo the UK.

Ultimately, if you ask for the impossible it doesn’t matter who you ask, the answer will always be the same. What will change is that French president Emmanuel Macron has lost what he had hoped would be his key ally in driving forward various programmes of EU and Eurozone reform.

While she remains there will clearly be the gradual onset of lame duck status. This backdrop will not help the UK in its negotiations but again, it would be easy to overplay.

Stepping back from the prism of Brexit this is a historic moment and though it is probably too soon to address Merkel’s legacy I would say this. There are certainly plenty of policies she has pursued that I have disagreed with but in 2015 she stood up for a policy of welcoming migrants.

As she said: “It was an extraordinary situation and I made my decision based on what I thought was right from a political and humanitarian standpoint.”

I cannot imagine any UK Prime Minister from the last decade either pursuing that policy, or using those words so for now let’s forget the many differences we had and remember her for that. As the atmosphere towards refugees and migrants gets ever more toxic we will need politicians to show leadership and stand up for them, as she did.