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Transcript

00:00:01
>> European markets reacted calmly to the latest threat to German chancellor Angela Merkel's rule. A testament to the perceived stability of her administration. But convincing her interior minister not to resign, and therefore saving her coalition, has still left her weakened. Because it forced her to take a tougher line on immigration than she wanted.
00:00:24
Reuters' Breakingviews global economic editor Swaha Pattanaik.>> She's the ultimate survivor and has survived yet again. Which is the key thing in all of this for investors, and probably for her government. The negotiations were difficult, I think, partly because of the stance that the CSU, her Bavarian allies, have taken.
00:00:43
She has made some concessions, but it's also not clear what they wanted out of her. After she came back from the European summit with considerable grant given by other countries to her.>> Merkel and other European Union leaders plan to create what they call, quote, controlled centers. Where illegal immigrants would see faster processing for asylum or deportation.
00:01:09
And that wasn't enough to appease the Bavarian party. So she's also now proposed special areas along the border with Austria. Where migrants who are already registered in other EU states would be held, effectively stopping them from crossing. Even if Austria agrees to this, it might not end Merkel's troubles.
00:01:28
>> The stability that the market sees is probably very skin deep, unfortunately. What Ms. Merkel has done has perhaps displaced the argument that was going on between her party and her Bavarian allies into the social democratic camp, the part of the coalition government, the center left. They don't like these transit centers that have been agreed, so this may actually put some pressure within that party.
00:01:54
This coalition is, all sorts of fissures are appearing.>> Social democrats say they need more time to think about the plan.