Angela Merkel’s Christian Democrats (CDU) suffered badly in last September’s election and economist Liam Halligan believes it has “not been good for Brexit”.
The German Chancellor is attempting to thrash out a grand coalition with the Social Democrats but the resignation of SPD party leader Martin Schulz has thrown the agreement into doubt.
And with Mrs Merkel distracted on the home front, Britain must fight to secure a deal with the EU’s economic powerhouse.
Mr Halligan said if Britain hopes to succeed after Brexit, Theresa May needs to secure a trade deal with the EU by appealing to Germany’s need for UK exports.
However a “distracted” Germany would give more power to the European Commission as Berlin attempts to deal with internal “political chaos”.
Ms Merkel secured just 33 pecent of the vote forcing the German Chancellor into another power-sharing agreement with the SPD.
The coalition must be ratified by a postal vote of almost half a million SPD members – which the outcome Mr Halligan says “is far from certain”.
Should the CDU-SPD deal topple another election could be triggered which would plunge Germany “into further months of political torpor” – all while “the Article 50 clock keeps ticking”.
Mr Halligan, writing for the Telegraph, said: “The EU’s commercial powerhouse and paymaster has been without a government for almost five months has not been good for Brexit.
“With the EU’s most powerful nation badly distracted, the Commission, motivated less by members states’ interests than by administrative diktat, would remain centre stage.
“That would be extremely bad news for the UK’s Brexit talks.
“For Britain’s best hope of securing the UK-EU free trade agreement that is in everyone’s interests is to get beyond the technocratic, grand-standing Commission and negotiate with the member states, the most important of which is obviously Germany.”
The economist added Mrs May’s visit to Germany today is “important and timely”.
Mr Halligan said: “She should stress that the case for a UK-EU trade agreement is compelling.
“On-going tariff-free trade would help EU exporters to the UK more than their British counterparts, given the EU’s enormous cross-Channel goods surplus – some £95 billion in 2017.
“Mrs May should highlight that Britain is Germany’s third-largest market, accounting for almost 10 per cent of German goods sold abroad. Exports to Britain support 1.3 million German jobs, with 750,000 British jobs dependent on UK exports to Germany.
“After Brexit, the UK will be the EU’s biggest external market, accounting for almost 20 percent of EU exports to non-EU countries, another reality Mrs May should emphasise.”
Mr Halligan also cited the head of Germany’s main employers’ group who previously said it would be “very, very foolish to erect trade barriers against Britain”.