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June 22, 2016

Still too close to call

Today is the last day of campaigning in the British referendum. The average of the last six opinion polls gives us a very clear picture: it is exactly 50-50. The FT's poll of polls has Leave ahead of Remain by 45-44, but note that gap are drowned by the error margin which must be at least 3% on either side. That's only the statistical error, not the invariable systematic errors related to whether people change their mind, tell the truth, whether they vote at all, let alone whether the sample is representative. We can conclude that, based on the polling that is available so far, the result is too close to call. And that statement is technically even true if you choose to believe any single one of the polls.

The campaign has reached a stage where everything has been said. There is no new information. It is our sense that the murder of Jo Cox last week halted the momentum behind the build-up in support for Leave but that it has not fundamentally changed the debate, or the general attitudes. All the Leavers we know peronally - and we know quite a few - are still Leavers. We are also wondering whether we may be seeing a re-run of the "Shy-Tory" phenomenon in the 1980s, which led opinion polls to underestimate Tory support systematically because people were simply too embarrassed to admit that they supported Margaret Thatcher. We suspect that the Queen may be one of those Shy Leavers. There is a report out this morning that she asked guests at a dinner party to give her three reasons why the UK should remain in the EU. While Buckingham Palace was trying hard to pretend that this question did not reveal a preference, we all know that this is not a question somebody would ask if they were convinced of the case for Remain.

British newspapers are also divided - including those of within the same stable. The Sun is for Brexit, the Times is for Remain. The Daily Mail is for Leave; the Mail on Sunday is for Remain; and the Scottish Daily Mail is also for Remain. Journalists and publishers with conservative instincts are conflicted between their own inherent euroscepticism and their loyalty to David Cameron and the Conservative government.

Commentators have also declared their preferences. It is no surprise that all the FT commentators are all in favour of Remain. We especially liked Martin Wolf's column today. If Remain and its supporters had campaigned on those lines all the way, we would be in a different situation today. We quote his conclusion:

"UK withdrawal would herald western weakness and global disarray. This is why all the UK’s friends favour its membership. Withdrawal might mark the beginning of a dissolution into growing disorder, not only in Europe but also far beyond.

Nobody can fail to recognise the profound distrust of elites that animates the Brexit campaign. But xenophobic populism is never the right answer. At the end of this wearying campaign, the voters must realise who they are and the weight of what they must decide. Yes, the British might well survive on their own. But why should they try? Britain can be far better than that. Let it choose engagement. Let it choose Europe."

We know that Remain supporters have become more emotional and truthful as they stare at the possibility of defeat. The number of newspapers and commentators in favour of Remain is surprising large. But after decades' worth of anti-European rhetoric, we doubt that these endorsements will have much of an impact.

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June 22, 2016

What will the PSOE do?

Even if it falls to third place after Sunday's elections, the PSOE remains central to Spanish politics because of its ability to make deals with Ciudadanos, presumably Podemos, and - though the party denies this - the PP. Therefore, the ultimate outcome of the elections depends on how the PSOE reacts to the actual result. 

In El País, Fernando Garea writes that the resolution of the Spanish impasse will require the sacrifice of at least one party leader, and that Mariano Rajoy and the PSOE's Pedro Sánchez are the most likely candidates. Jordi Sevilla, who leads the PSOE's economy team, has tweeted ambiguously that the government should go to whomever "has the most parliamentary support" even if there is no majority. This is interpreted as meaning that the PSOE will want to argue that together with Ciudadanos they have more seats than the PP, and that the PP should abstain. Alternatively, the PSOE leadership would be contemplating an abstention of PSOE and C's to allow a PP minority government on condition that Rajoy steps back. The PSOE leadership's worst case scenario appears to be that Unidos Podemos and PSOE add up to over 170 seats together, as in that case it would be politically very costly for the PSOE to refuse a left government. But they would demand a PM other than Podemos leader Pablo Iglesias. This all depends on Pedro Sánchez surviving election night. The PSOE leadership has been known to argue that "under the circumstances" in 2011 their worst election result until then was not that bad, and the leader could stay on. The possibility that the PSOE might lose its first place in the Andalusia region (the official CIS poll puts PP and PSOE tied at 20 seats) would defuse the threat posed to Pedro Sánchez by Andalusian premier Susana Díaz.

Jesús Cintora in El Diario writes that his sources tell him Rajoy would be willing to step aside if he can name a trusted sucessor that would protect him from corruption allegations, pointing to public works minister Ana Pastor as a likely comprimise MP. Pastor was coincidentally named by Ciudadanos MP Juan Carlos Girauta among a list of acceptable PP figures. Cintora writes that the PP hopes that Pedro Sánchez will be replaced by Susana Díaz, so this plan might be jeopardised if the PSOE does badly in Andalusia, too.  

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June 22, 2016

Is Renzi changing his mind on the referendum?

La Repubblica focuses this morning on the future of the Partito Democratico, and how it will respond to the disastrous mayoral elections - the loss of Rome and Turin in particular. The most important story is a hint - no more at this state - that Matteo Renzi might abandon his earlier pledge to resign if he loses the constitutional referendum, following David Cameron's recent statement (except that we believe that Cameron will resign if Leave wins despite of what he may be saying now). While the polls are still suggesting a majority in favour of the changes, there is widespread panic among top politicians in Italy that the referendum might be lost precisely because of Renzi's threat - as it has turned the referendum into a mid-term political contest.

La Repubblica says the resignation of Matteo Renzi - and his reform minister Maria Elena Boschi - is not the only option in case of a defeat at the October referendum. It is possible that the party draws up a comprehensive plan B. The paper says Renzi had discussions with his staff on this issue. The only public statement that hints at a more flexible response was a quote in which he said that politicians will always will have to deal with new information and a shifting consensus. There is now talk within the PD about a relaunch of the Renzi agenda - a 2.0 type plan for the PD. Former PD leader Pier Luigi Bersani is proposing collaboration between the PD and the Five Star Movement in areas where they have joint interest. We doubt this is going to happen because the Five Star Movement is now sensing the possibility that it might seize power at the next elections. 

This is a development to watch. If the Remain camp wins in tomorrow's referendum, Italy's referendum is going to be the next moment of high uncertainty for Europe.

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June 22, 2016

French politics and CGT protests

What do Nicolas Sarkozy, Marine Le Pen, and Emmanuel Macron, have in common? All three oppose the idea of curbing the trade unions' right to demonstrate. It is certainly not out of sympathy for the communist trade union CGT, which still has to decide whether to go ahead with protests despite the government’s threat to prohibit them next week. It is the result of a clear political calculation, another bullet against an already weak government. Francois Hollande and Manuel Valls were too quick to threaten a prohibition, concludes Cecile Cornudet. The El Khomri labour law has became a platform for too many controversies about the substance and procedure of labour reforms and social dialogue in France. The executive aimed to demonstrate its capacity to reform, its ability to talk, and now its ability to maintain order and to enforce the law. There is a lot at stake here, and Sarkozy, Le Pen, and Macron have understood this. 

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