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September 08, 2016

Le Pen leads and Macron comes third in polls

The latest poll confirms what columnists in France expected. If Emmanuel Macron were to run in the first round of the presidential elections on his own platform En Marche! he would surpass François Hollande, perform better against Nicolas Sarkozy than against Alan Juppé, and lose some percentage points if Francois Bayrou decided to run. But, under all circumstances, he would only come third in the first round of the presidential elections regardless of the other candidates. So, he will not have enough support to get into the second round no matter what. Hollande has even less support. The second round looks likely to be between Le Pen and the Republican candidate, and Juppé is more likely than Sarkozy to get the centre-left to back him. The question is what will the candidates in the centre and on left will do.

The TFS Sofres poll for Le Figaro, taken three days after Macron quit the government, assumes that Macron will not run in the Socialist primaries but as a candidate of his own movement. After the traitor comments from Francois Hollande, this assumption seems reasonable. The poll suggests that. in case Sarkozy runs, Macron would get 16% against 9% for Bayrou, Hollande 11%, Sarkozy 20% and Le Pen 26%. Without Bayrou, Macron gets 18% against 12% for Hollande, 22% for Sarkozy, and 27% for Le Pen. If Juppé is the Republican candidate and Bayrou is not running, Juppé would perform better than Sarkozy with 25% against 28.5% for Le Pen; Macron would remain at 15%, and Hollande at 11%. Without Macron, Hollande would fare better but still come in only third. Marine Le Pen is leading the polls. There is only one scenario where this is not the case: when Juppé runs against Hollande, without Macron or Bayrou, he would be in the lead with 33% against Le Pen with 28%. Macron would perform best if neither Hollande nor Bayrou were to run and Arnaud Montebourg were the Socialist candidate instead, but with 20% he still would trail behind Sarkozy (22%) or Juppé (27%) and Marine Le Pen (27%/27.5%). 

Another poll shows that 9 out of 10 oppose François Hollande's candidacy, according to this article. With 88% this is 4pp higher than in July. Fully 72% of left voters do not want Hollande in the game. Analysts say that, barring a miracle, Hollande is finished politically. In this case, Macron is the favourite candidate of the left (26%).

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September 08, 2016

Corbyn wants out of the single market

In the current leadership contest taking place in Britain's Labour Party, the issue is not only between the hard left and the soft left, but between two decisively different visions of what to do after the Brexit vote. The challenger, Owen Smith, wants the party to endorse a second referendum with the goal of undoing what happened on June 23. The incumbent, Jeremy Corbyn, not only accepts the outcome of the referendum, but wants Britain to leave the single market, as it became known yesterday. On this point, he is actually siding with the right-wing Tory eurosceptics. From the perspective of the Labour Party, the choice is thus between a return to EU membership, or a cold hard Brexit. Judging from the polls and commentary in the UK, Corbyn is the odds-on favourite to win this contest.

George Eaton writes that, on some level, Corbyn's anti-single-market position is unsurprising. He opposed every European treaty in the past. He is at odds with the majority of his parliamentary party, as well as the Labour party in Scotland and the Labour administration of London. Eaton makes the point that Theresa May's position of wiggling between single market access and immigration control is not going to work. Corbyn's position is likely to benefit the hard-liners in her administration. 

Chris Giles does a good job debunking May's claim to make Brexit work for everyone. She will have to make tough choices, and there will be losers. The essential choice is whether to prioritise GDP growth or a reduction in income inequality. There are binary trade-offs between the interests of small British companies, that might favour deregulation, and large foreign ones that benefit from the single market; and between the interest of Britons who want to control immigration, and British residents abroad. He makes the point that the government needs to abandon the idea of making Brexit work for everyone before it is able to devise a coherent strategy. As an example he proposes that the UK might contribute to the EU budget in exchange for keeping the European Medicines Agency in London, and to stay part of the EU regulation of medicines. May deserves a period of indulgence, but she will soon need to come clear about the trade-offs.

Chris Giles is right, of course. There are binary choices ahead. This is why we think the likes of David Davis, the Brexit minister, are likely to prevail because they have a better understanding of the nature of the trade-offs. The EU will not accept single-market membership, even partial membership, of a country imposing immigration controls. An Norway-style emergency break Norway is thinkable, but we are not sure whether there would be a majority for such a solution in the European Council. A far more likely course would be an extended agreement on trade and investment, with added regulatory components taking account of the fact that the UK might remain associated to a specific but clearly delineated subset of EU policies. But that would still not mean a single passport.

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September 08, 2016

Is Renzi's strategy plausible?

The scandal surrounding the new administration of Rome may end up helping Matteo Renzi as the Five Star Movement appears to be failing its first big administrative test. We think it is too early to call this, but the mess created by the new mayor of Rome, Virginia Raggi, with some of her appointments does not bode well. Whether it helps Renzi to win the referendum in November, however, is less clear. He narrowed down the date range to between Nov 15 and Dec 5. We noted a story by Reuters quoting an interview on Italian TV in which he said that he had not changed his mind on his promise to resign, but prefers not to talk about it. That's fair enough.

We noted a thoughtful comment by Maurizio Ferrera on the front page of Corriere della Sera this morning, writing that Renzi's political and economic strategy makes sense from a purely domestic perspective, but not from a European one. Renzi is right when he says that it takes time for reforms to work, but how can we really be sure that the government's agenda is sufficiently ambitious? What are the time frames in which the goals are to be delivered? Where is the team of experts Renzi had promised, to monitor public policy? And does the strategy have the support of the employers, the trade unions, and other non-government actors? Ferrera makes the point that unless there are clear answers to those questions, it is quite dangerous for Italy to embark on a course of fiscal laxity which might only produce another crisis.

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  • Tsipras holds EU-Med summit
  • Consensual or bold?
  • Will Finland join Nato?