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October 28, 2016

Netherlands about to sink EU-Ukraine association deal

The Netherland approaches a self-imposed deadline to take a position on the EU-Ukraine association agreement on November 1, next week. Mark Rutte has attempted but failed to gather support for adding a declaration to the agreement. The statement would deny Ukraine the prospect of EU membership, and would give the Netherlands an opt-out clause from military cooperation. Rutte's problem is that his VVD-PvdA coalition does not have a majority in the Eerste Kamer (upper house), even with the support of the left-liberal D66. The Christian democrat CDA, which among the opposition parties has the largest faction in the senate, remained steadfastly against the association agreement. According to NRC the opposition wants Rutte to first renegotiate with the EU and the other member states before submitting a proposal to the Dutch parliament. The government, however, finds that negotiating without getting a mandate from the parliament - and therefore with no guarantee that the result of the negotiation will be ultimately accepted at home - is a non-starter. As a result, Rutte is expected to propose to his cabinet today to introduce a motion to repeal the Dutch law ratifying the agreement, which has not come into force as a result of the negative referendum result in April. 

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October 28, 2016

What Brexit effect?

The UK economy grew by a shockingly large 0.5% in Q3, an annualised rate of over 2%, which makes the UK the best-performing of all the large economies in the world. The reason is a strong expansion in consumption, which more than offset declines in agriculture, construction, and manufacturing. Some economists quoted by the Guardian were warning that the real Brexit hit may yet come. We think this is an attempt to justify the economic profession's insanely exaggerated negative predictions before the referendum. In a separate development, we noted that Nissan decided to build the next generation of its Qashqai and X-Trail models at its factory in Sunderland. This decision came as a surprise as the company previously said it would only do this if it was given guarantees that it would be compensated for any tariffs it might face on its products. The British government denied that it had given a sweetheart deal to Nissan, but acknowledged that Theresa May had given general assurances of compensation for post-Brexit risks to manufacturers.

On economic growth: We discussed an argument in yesterday's edition according to which an interim post-Brexit agreement would have little economic impact on the grounds markets would ultimately discount the final deal. If that argument is correct for the future, it surely applies to the present. If the markets were convinced a negative long-term effect of Brexit, there is no way the economy would be expanding at a annualised rates of 2% during the quarter after the vote. We cannot even invoke uncertainty in defence of Brexit gloom because the scenario of a hard Brexit is nowadays widely discounted. Any surprise to the expected scenario is likely to be on the upside.

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October 28, 2016

Syriza's contempt for the TV court ruling

The Greek government’s cynical responses to the high court’s decision that the TV license auction suggest that we are witnessing yet another round of a vicious cycle of political blame game. The author of the bill, Nikos Pappas, said that ”the Council of State decision spawned an injustice” and that “the judges will be judged too.” Syriza’s bully-in-chief, Pavlos Polakis, called it a “judicial coup” and spokeswoman Olga Gerovasili’s insisted that “nothing will stand in the way of the government’s determination to bring some order to the radio and television landscape.” Several Syriza MPs see the ruling as a political decision and thus won’t accept the verdict. The judiciary trade union condemned these attacks as “dangerous for our democracy and the rule of law.” The problem is that, once at this stage in the game, none of the protagonists takes the other seriously anymore.  Greek Reporter has a scathing comment on the government's total disrespect for the judicial ruling. Meanwhile, the opposition parties demand snap elections. 

As for the TV licences, the transitional amendment the government wanted to table on Monday hasnow changed. Kathimerini reports that Tsipras asked Parliament Speaker Nikos Voutsis to assemble the House’s speakers on Monday with the aim of convening the media regulator ESR.

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October 28, 2016

When the French police mobilise via social media

A movement in France we have not covered so far is the ongoing protests of police forces against their ever-increasing workload, outdated equipment, and rules restricting their ability to defend themselves. There had been 10 days of nightly demonstrations in cities across France, spontaneously organised through social media by officers who view the government, the police hierarchy, and the trade unions as "out of touch". The wave of protests was prompted by an attack on four officers by a gang armed with Molotov cocktails. Two officers were seriously wounded, and one of them remains in a serious condition in hospital. The protest movement has strong backing from the public. In response, the government promised an extra €250m, and a review of officers' rights to defend themselves when under attack. Francois Hollande received not the protesters but their trade unions yesterday. However, the nightly marches continued, writes Journal du Dimanche.

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