BERLIN (Reuters) -- Half a year ago, the political stars seemed perfectly aligned for a deep reform of the European Union and its euro currency.
Emmanuel Macron had won the French presidency on a promise to relaunch Europe. And Angela Merkel, on track to win a fourth term as German chancellor, looked ready to embrace his bold vision, telling an audience in Bavaria that it was time for Europe to take its fate into its own hands.
Following the collapse of German coalition talks, however, the prospects for a meaningful leap forward in European cooperation, driven by newly minted governments in Berlin and Paris, look dimmer than ever.
"Political uncertainty has crossed the Rhine,” said Jean Pisani-Ferry, an economist and academic who helped write Macron’s election program. "Europe has gotten used to having a strong German government with clear positions. That is something we may not have for some time.”
Germany now faces months of political limbo that will narrow an already tight window for agreeing reforms of eurozone governance and EU defense and asylum policies.
Should Germany be forced to hold new elections, its partners may have to wait until next summer for a government to take form. By then, Europe will be entering crunch time in its Brexit negotiations with Britain, preparing for sensitive discussions on a long-term EU budget and gearing up for the election of a new European Parliament.
Eurozone leaders were due to begin a six-month discussion on closer integration of their 19-nation currency bloc next month at a special summit in Brussels. Now that debate seems likely to be delayed and officials say the chances of reaching any conclusions by June 2018, as proposed by European Council President Donald Tusk, are slim.
"Things will go on hold until there is a formal acting German government,” one eurozone official said. "At this stage I don’t see what steps the leaders could take in December or June for deepening eurozone integration when there is a German government without a mandate.”
Another casualty could be the completion of an EU pact on closer defense cooperation, known as PESCO. Berlin and Paris had hoped to sign it into law at a regular EU summit next month. Now diplomats involved in EU foreign policy say that may be overly ambitious.
Germany has also been a driving force behind EU efforts to reform its asylum policies in the wake of the 2015 refugee crisis. Those discussions, pitting countries like Italy and Greece against Poland and Hungary, were already bogged down. Without a new government in Berlin, there is next to no hope of a breakthrough.
"We have so many things we need to do urgently that slowing us down is not good for Europe as a whole,” Frans Timmermans, a former Dutch foreign minister who is deputy head of the European Commission, told CNN.