JSE closes weaker as elusive Merkel coalition deal rattles global markets

JSE closes weaker as elusive Merkel coalition deal rattles global markets

JSE closes weaker as elusive Merkel coalition deal rattles global markets

Meanwhile, Seehofer has also dropped his threat to quit.

Sky News' Dominic Waghorn details how Angela Merkel turned around the latest political crisis involving the issue of immigration.

The conflict between Angela Merkel and her Interior Minister Horst Seehofer is so severe that either she loses face or they both lose their jobs and Germany is without a chancellor, political scientist Werner J. Patzelt told RT. "We now have a clear agreement on how to prevent illegal immigration across the Austrian-German border in the future", he added.

"Angela Merkel doesn't want to move or is unable to move due to European obligations", says Patzelt.

In effect, the likely outcome of the deal is as Dr Merkel wished - a European one.

Merkel could have fired Seehofer.

Seehofer, who is also the leader of the Bavarian Christian Social Union - which is closely linked to Merkel's Christian Democrats - had threatened to resign because the Chancellor would not refuse entry to migrants who have asylum claims pending in other European Union countries.

"CDU and CSU have no interest in a split and the chances are over 90% for the coalition to survive for now", said retired politics professor Eckhard Jesse.

Only once before has the cooperation been at risk - in 1976 when Bavarian leader Franz Josef Strauss thought the CSU would fare better in elections if it were free of the CDU.

But after hours of tense negotiations, the Associated Press reported Seehofer emerged from talks saying he had reached a compromise with Merkel and that he would remain in his positions.

If the CSU had withdrawn its support for Merkel's coalition, she would be left without a majority in the German parliament, possibly prompting fresh elections.

The Social Democrats, who have largely been bystanders so far, demanded that their coalition partners get their act together, and called for a meeting later Monday with the conservative leaders.

The leadership of Merkel's party approved a resolution Sunday stating that "turning people back unilaterally would be the wrong signal to our European partners".

Both European and United States markets had mixed macro data outcome on Monday and it had little effect on the pair as investors were focused on German political proceedings. Although she called the standoff "very serious", Ms. Merkel underlined her support for Germany's negotiation position with European Union partners, and again argued that this would be weakened if Berlin opts for a unilateral migration policy.

The most important factor for her survival is probably how long her own CDU lawmakers stand by her, and for now they are.

What did Mrs Merkel negotiate with the EU?

He said the two parties should be aware that the far-right Alternative for Germany, which has soared in prominence since a wave of migrants fleeing conflict and poverty headed to Germany in the summer of 2015, stood ready to benefit from a meltdown of the conservatives.

Merkel, who has been in power for 13 years, is suddenly reversing her immigration policy in the hopes of keeping her government together, according to new reports.

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