Merkel & Seehofer defuse tensions over immigration policy

Angela Merkel and Horst Seehofer in happer times at a September 2017 campaign rally

After nearly eight hours of talk with the CSU party leadership, Mr. Seehofer said he saw three options: The CSU bows to the chancellor's asylum policy; or, as interior minister, he turns back some migrants at Germany's borders, a riskier option which could destroy the coalition; or, lastly, he resigns as party leader and minister. The deal, partly agreed to by Merkel to avoid divisions in her party, still must pass a series of approvals - from the Social Democrats, the other part of Merkel's coalition.

Germany's constitution prevents federal ministers from outright quitting their positions, and must request to be dismissed by the German President.

As Merkel won key concessions from European Union partners on toughening migration rules, Seehofer and the CSU faced increasing pressure from other parties to avert a historic coalition breakdown.

The EURUSD pair got a 30 pip boost post Germany's Seehofer comment that a clear solution to stopping illegal immigration at the German-Austrian border has been agreed upon during his meeting yesterday with Chancellor Angela Merkel.

"I am glad that this agreement has succeeded", he told reporters.

The quarrel threatens to derail Germany's fragile coalition and the 70-year-old alliance of CDU and CSU.

"Both the chancellor and (Bavaria's Horst) Seehofer are damaged".

However, the row with the CSU appears to have galvanised support for Merkel within the CDU ranks, even though many members prefer Seehofer's policies.

"We discussed common solutions to fight clandestine immigration between one European Union country and another and the protection of Europe's exterior borders", Salvini said in a statement.

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Merkel has faced a strong backlash, and been weakened at the polls, over her 2015 decision to keep open German borders to a mass influx of migrants, many from war-torn Syria, Iraq and Afghanistan, that led to more than one million arrivals.

As the CDU and CSU parties hunkered down in Berlin and Munich, leaders on both sides sought to clarify what was a stake.

Nevertheless, the anti-refugee, anti-Islam Alternative for Germany (AfD) was propelled into federal parliament for the first time previous year by outrage over immigration, leading to months of paralysis while Merkel struggled to put together a workable coalition.

Up until Monday, Merkel remained unabated defender of her approach to the migrant crisis rocking the continent.

"She was able to to compromise, but she's totally sold out her political principles with this".

The public approval has been largely in favor of Merkel's policies since 2015 but the support started to wane as the country began experiencing problems absorbing the new residents, the Times reported.

Otherwise, a new election is possible.

Merkel, who has been in office since 2005, warned last week the issue of migration could decide the very future of the European Union itself.

"It's not about who comes out on top, but about what's right", Bavarian state premier Markus Soeder told the CSU gathering, according to news agency DPA.

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