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May 20, 2016

The case for an EU-wide social security number

Tito Boeri makes an important practical suggestion for the next stage in European integration: the EU should introduce a single social security number that allows governments to track workers as they move from one country to another. One tangible benefit would be to stop welfare fraud. It would also be an important step towards a single European labour market as it creates a link between benefits and past contributions. Another benefit this would have is a more informed debate on migration, as it would provide statistics on the net contributions of newcomers. The results would be eye-opening. Economic migrants are actually net contributors to social security systems as they are mostly young. In Italy the net contributions amount to 0.3% of GDP. Refugees are net recipients, but this is only because they are not allowed to work. Boeri believes, however, that the fundamental argument is economic. Facilitating the free movement of workers is fundamental to restoring growth in Europe.

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May 20, 2016

Is Remain pulling ahead?

We noted yesterday's briefing that two of the most recent polls show a trend towards Remain. There is more. The following is from the FT. Forget the actual numbers. What seems to be happening is a widening in the lead of Remain by a larger number of polling organisations - ComRes being the latest one. Not a trend yet, but one to watch. And there is still a month to go in the campaign.

Stay Leave Undecided Date Pollster Sample
52 41 7 May-19 ComRes 1,000
44 40 12 May-17 YouGov 1,648
48 35 14 May-16 Ipsos MORI 1,002
51 45 4 May-15 ORB 800
43 47 10 May-15 ICM 2,048
47 39 14 May-15 ICM 1,002
38 41 21 May-12 TNS 1,222

Source: FT

Simon Tilford and John Springford present one of the most convincing pro-EU arguments we have yet heard. While a minority of eurosceptics in the UK are genuinely committed to openness, most of them are narrow-minded nationalists who oppose globalisation, immigration, and liberalism. This is a battle over the future ideological direction of the country - within the Tory party specifically. They also note a correlation between euro-sceptics and climate-sceptics. 

"Right-wing populists do not just have the EU in their sights – they want to take over the Tory party and the country. The failure of Conservative moderates to face down these ideologues and their backers in the media mirrors what is happening in the US which has culminated in Donald Trump becoming the Republican candidate for the presidency. But whereas Trump has little chance of becoming president, the outlook in the UK is more worrisome." 

László Bruszt and Nauro Campos express a sentiment we have heard surprisingly often, including from very senior establishment figures. While Brexit would be terrible, a decision to remain in the EU might be even worse. Their focus is on eastern Europe. A Remain victory would strengthen the likes of Viktor Orbán, who would want a similar deal to what Cameron got. The authors point out that the CEEs would be the biggest winners of real integration since they have not a lot of sovereignty to lose, given that most of their companies and banks are foreign-owned anyway. At least the EU is giving a stronger voice in the political. Brexit would at least pull the rest of the EU more together. 

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May 20, 2016

Will a weed killer set off a revolt?

We normally treat the regulatory aspects of the single market and the CAP as outside our reservation, but we should not lose sight of the potential political implications of the row over the licence renewal for glyphosate, a weed killer produced by Monsanto. Yesterday, a proposal by the Commission to renew the licence for glyphosate did not find a sufficient majority in the council with France and Italy against, and Germany abstaining, so that the necessary majority of countries representing 65% of the EU's population was missed (the 55% majority of the number of member states in favour was reached).

The glyphosate licence renewal interacts with a number of potential political story lines. Opponents of glyphosate not only point out the health risks, but also highlight the interaction between the herbicide and genetically modified organisms (GMO). Of the 61 GMOs the EU has accept for import, about half are estimated to be glyphosate-tolerant. So expect this story to play a role in public attitudes in the TTIP debates. The regulation of glyphosate is also one of the big issues of disagreement between the CDU, which is in favour, and the SPD. This is why Germany abstained. A further complication is Bayer's takeover bid for Monsanto, which was also confirmed yesterday.

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May 20, 2016

How Hollande got rid of one potential contender

This is the end of the Greens in the French assembly. Six of the party members joined the Socialists. Only 9 remain while 15 are necessary to build a parliamentary group. What happened? The scandal about sexual harassment around Denis Baupin, now former vice-president, was the last act accelerating the implosion. For months there has been a bitter battle inside the EELV group, according to Le Monde. Its leader, Cécile Duflot, once heralded as a rising star with presidential ambitions, got in and out of Hollande’s government in protest against Manuel Valls. Since then, she plays the anti-government card, and battles with pro-government reformists inside the group. It looks like Francois Hollande got rid of one competing candidate on the left.

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