The CDU is likely to turn to the right as a result of AKK’s resignation. That, in turn, will probably cause the coalition to break up at some point in the near future. The SDP will move to the left; polarization will increase; and Germany as a whole will turn inward. The likelihood of major EU institutional reform, already low, will be even further diminished.
The one silver lining in this grim picture is that Germans will once again have two clear choices in the political mainstream instead of a muddle and extremist opposition. Other than that, it’s hard to see how the EU is going to get a grip on its problems if Macron is the only leader who has an interest in reform. The drift will continue until further notice, and Italy looms as the next crisis.