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European leaders have reacted with dismay to the breakdown of Germany’s coalition talks, warning that the power vacuum in Berlin risks leaving time-sensitive EU objectives, such as euro reform and managing migration, in limbo.

“It’s bad news for Europe,” Dutch foreign minister Halbe Zijlstra, said in Brussels on Monday. “Germany is a very influential country within the European Union. If they don’t have a government, and therefore do not have a mandate, it’s going to be hard to take tough decisions.”

Emmanuel Macron, French president, who has based his hopes of quick progress on eurozone reform and broader EU renewal on building a tight partnership with Angela Merkel, Germany’s chancellor, said it was not in France’s interest that the situation “tenses up” any further. “We have to carry on,” he said, adding that he had spoken with Ms Merkel on Sunday evening.

An immediate concern is the fate of December’s summit of EU leaders, which was supposed to galvanise work on strengthening the eurozone economy, advance discussions on refugee policy and potentially kick-start talks on Britain’s relationship with the EU after Brexit.

Ms Merkel — who is now weighing options ranging from seeking to revive talks with the liberal FDP and Green parties to pursuing fresh elections — plans to attend the meeting irrespective of whether a new German government has been formed. But other capitals fear her room for manoeuvre on important issues is likely to be severely constrained.

One official pointed out that the summit aims to advance work on an EU approach to handling influxes of asylum seekers, yet refugee policy had been a key faultline in the German coalition talks.

Diplomats said the fallout from Germany’s domestic situation on the December summit was likely to be limited because in some areas Berlin’s position was clear and unlikely to shift. Also, in some areas EU expectations for progress in December had already been anchored by other factors.

On migration, hopes of progress have been curtailed by the fact Italy is preparing for a general election next year and Rome is unlikely to countenance significant EU policy steps on the issue.

German officials had also played down the prospect of big December breakthroughs on eurozone reform even before the coalition talks broke down. “The acting German government won’t be under pressure [to reach decisions in December],” Peter Altmaier, Berlin’s acting finance minister and a key ally of Ms Merkel, said in Brussels earlier this month.

But officials point to significant problems in the longer term if the situation remains unresolved — especially if Germany heads for fresh elections, a move that would be likely to delay the formation of a government until at least spring 2018.

“This was clearly not our central scenario,” a French official told the Financial Times. “Germany and Merkel are likely to be busy with domestic matters.”

The threat is heightened by the fact that EU leaders have an unusually choreographed agenda for the coming months. Donald Tusk, EU Council president, has sought to channel Mr Macron’s reform drive into a detailed road map of how and when leaders will address major issues from now until 2019 — a period identified by Brussels as a rare political “window of opportunity” to get difficult tasks done.

The French official pointed to eurozone reform as one area that could be jeopardised by prolonged wrangling in Berlin. Mr Tusk has called on leaders to reach decisions on big issues, such as a backstop fund for the bloc’s banking union, by June.

Leaders are also scheduled to have crucial political discussions in February on the organisation of the next European Parliament elections and the process for appointing the next president of the EU Commission.

Another thorny issue is the impending election of a new president of the group of eurozone finance ministers, although Mr Altmaier has said the decision will go forward whether or not Germany has a new government.

The other uncertainty is over Brexit, with the EU awaiting a new exit bill offer from the UK. London has high hopes that a planned meeting between Theresa May, the British prime minister, and Ms Merkel on Friday — on the sidelines of a summit between the EU and eastern European countries — will help remove obstacles. But that depends on whether Ms Merkel sticks to her plan to turn up.

On the substance of Brexit, Germany’s mainstream parties are reasonably aligned and the political situation in Berlin is unlikely to change much in the short term, ministers and diplomats say.

“It doesn’t really affect the Brexit process,” Mr Zijlstra said. “At the moment we’re waiting for a substantial offer from the British, and there is a not really a role for the Germans at the moment.”

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