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November 02, 2016

How not to address the rise in populism

The US elections are firmly outside our reservation, but we can't help noticing some eerie parallels to the Brexit referendum, and would like to reiterate a narrative we have been telling our readers for some time - that the policy establishment is in danger of losing out not only because of bad policies, but also because of grave tactical misjudgements. These misjudgement are now becoming prevalent in both the US elections and the Italian constitutional referendum.

With less than a week to go in the US, the similarities between the Brexit referendum and the US elections are becoming more striking. The US has had its equivalent to the disastrous Project Fear campaign. Just as the Remain campaign failed to make a positive case for their position, the Democrats have failed to generate a positive message for their candidate. And now we are reading that 370 economists have written a joint letter to warn against Donald Trump. The issue is not the content of the warning but the arrogant tone, in particular the criticism that Trump is not listening to experts (another eerie parallel with the UK), and the delusional idea that this could in any way help Clinton or damage Trump. It tells us that the US policy establishment has not grasped the nature of the populist challenge, which is directed at them personally. It reeks of arrogance from a profession that lined up behind policies that have generated persistent global instability and economic weakness. And it tells us that the economics profession in particular still clings to the illusion of political influence and glory, while in reality they are the main targets of the insurrection. This is no longer 1992, when economists shaped the economic programme of the then president-elect Bill Clinton. Today's public blames economists for what has been happening, and the tactically correct response from economists would be to take the opportunity to lay low and shut up for once.

We also note a strong reliance on opinion polls, which culminated in the expectations until recently that Trump could not possibly win. This election will be decided by turnout, which polls may not be able to capture very well. Do not be fooled by numbers.

The other potential shock ahead of us over here in Europe is a No vote in the Italian constitutional referendum, where the polls continue to show No supporters slightly ahead. After President Barack Obama's endorsement of the reforms (remember his endorsement of Remain in the UK?), comes the German interior minister Lothar de Maiziere, who spoke of the Italian government's courage to change the constitution. The European experience of such outside interference is disastrous. Remember Angela Merkel's support for Nicolas Sarkozy in 2012 against François Hollande? The more the rest of the world tries to influence the Italian debate, the more this will backfire. There was a time when Italians listened to the outside world's opinion. That is no longer so. The Forza Italia and Five Star Movement immediately accused the German minister of interfering in Italy's own affairs. 

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November 02, 2016

German Social Democrats - the defenders of Putin's interests

One of the genuinely positive things about the terminal decline in the German SPD is the extent to which its leadership is literally in the pockets of Russia. This is more true today than it used to be. The allegation has always been made in respect of Willy Brandt and Herbert Wehner, Brandt's parliamentary chief in the 1970s, but no credible evidence has surfaced to support this. But we do know that Gerhard Schroder was once in the pay of Vladimir Putin, and that both Sigmar Gabriel and Frank Walter Steinmeier are Schroder's protegés - the former was his successor as prime minister in Hanover, the latter his chief-of-staff in Berlin.

FAZ this morning outdoes itself with a very good report on the lobbying behind the Nord Stream 2 gas pipeline project, which like its predecessor has Gerhard Schroder as supervisory board chairman. The CDU - but not Angela Merkel - is beginning to roar against Nord Stream 2. Norbert Rottgen, the head of the Bundestag's foreign policy committee, says that the German government was wrong to say that Nord Stream 2 was a purely private-sector operation, given that the effect it has on the security interests of Ukraine, Poland and the Baltic states.

Gabriel supports Nord Stream 2 as a project of mutual Russian and German interest - as it also involves, apart from Gazprom, some German companies including BASF and Uniper, previously known as Eon. Gabriel defends the project on the grounds that Europe needs a lot more energy in the coming decades, a view not shared by all experts. But, as FAZ notes, the reason for Gabriel to support this project is political. He is preparing the ground for a phase-out of sanctions against Russia, which is one of the SPD's few distinctive foreign policy positions ahead of the elections. The paper notes that Germans are afraid of a war with Russia and support the SPD's policy of detente, as a result of which the SPD is hoping for a political peace dividend next year.

Schröder's is to keep the SPD's party leadership aligned in favour of the project. Gazprom requires European partners, but this is difficult because Poland is threatening heavy fines on any company with Polish subsidiaries that participates in the project. As for Merkel, she is keeping out of it. She needs the SPD until the end of her term, and she, too, realises that the SPD's pro-Russia policy has a political constituency which she is not willing to leave to the SPD. 

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  • A correction on Catalonia
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • February 18, 2019
  • How the splits on the left and the right will affect Brexit
  • June 04, 2018
  • German discourse out of control
  • Wait for European disunity on US tariffs
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 14, 2019
  • Trump gives Orbán his blessing
  • Outcome of Belgium's parliament election on Sunday totally open
  • Has Trump really got the economics of trade all wrong?
  • October 01, 2018
  • After the referendum, more turmoil in Macedonia
  • What will happen if the UK parliament votes No?
  • Barnier's no-thanks works much better than a yes-please
  • February 19, 2018
  • SPD divided over grand coalition
  • Wauquiez - the French Trump?
  • Why Brexit will be extremely hard to reverse
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • December 01, 2016
  • Will Italian expats swing the referendum result?
  • Why we keep on misreading the polls
  • Si vis pactum, para bellum
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 24, 2019
  • May's final and biggest gamble
  • Will the EP be Brexit's great parliamentary beneficiary?
  • Can Loiseau fight the far right given her past?
  • October 22, 2018
  • A week of intense political tension in the UK
  • Poland's local elections reveal deeply-split country
  • April 20, 2018
  • Macron at home
  • EU has rejected all UK proposals on Northern Irish border
  • Could there be a Five Star-Forza Italia government?
  • October 19, 2017
  • Germany is softening up over Brexit
  • The French budget and the wealthy
  • Will Borut Pahor win re-election as Slovenian president?
  • April 20, 2017
  • Don’t bet on Trump turning globalist
  • A note on UK election polls
  • October 21, 2016
  • Wallonia says No for the third time
  • Do you remember that Dutch referendum on Ukraine?
  • How narratives are destroying the EU
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 17, 2019
  • The dreaded scenario
  • Meet the Labour no-dealers
  • March 05, 2019
  • The most promising Brexit strategy we have heard yet
  • October 22, 2018
  • A week of intense political tension in the UK
  • Poland's local elections reveal deeply-split country
  • June 11, 2018
  • The end of the G7 - good riddance
  • Macron needs allies for his European agenda
  • Who is going to be the next director-general of the Italian treasury?
  • January 30, 2018
  • Will Puigdemont be Catalan premier today?
  • Some thoughts about the German car industry
  • A short note on Italian coalition maths
  • September 22, 2017
  • The last German polls
  • May 15, 2017
  • SPD and CDU disagree on how to respond to Macron
  • Was Rajoy blackmailed?
  • The rise of the re-leavers
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 30, 2016
  • Brexit facts on the ground
  • Burkinis and Republican primaries
  • The SPD and TTIP
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 03, 2019
  • A bold but risky choice
  • What will the European Parliament do?
  • May 22, 2019
  • Better start those no-deal preparations right now
  • Europe's real transfer union is from east to west
  • April 09, 2019
  • What can go wrong now?
  • February 27, 2019
  • EU bets on stable dictatorships to guard its south
  • The grand débat context for the unemployment insurance reform
  • Survey suggests that political dividing line in Europe is between France and Germany
  • January 18, 2019
  • Why Dublin won't yield on the backstop
  • Town hall debates vs street protests - who is winning?
  • December 10, 2018
  • ECJ says UK free to revoke Article 50, even inside extension period
  • A turning point in Macron's presidency
  • China has added Portugal to the list of its key EU partners
  • Belgium's coalition implodes over Marrakesh pact
  • November 01, 2018
  • Is candidate Merz a keen pro-European?
  • Around the corner - Brexit edition
  • September 25, 2018
  • Be careful what you wish for - second referendum edition
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • July 16, 2018
  • How to think about the three Brexit options
  • How to respond to Trump
  • June 11, 2018
  • The end of the G7 - good riddance
  • Macron needs allies for his European agenda
  • Who is going to be the next director-general of the Italian treasury?
  • May 08, 2018
  • Macron and the technocratic republic
  • Philippe's silent offer to the SNCF unions
  • On the ordoliberal utopia of a debt-free state
  • April 06, 2018
  • Schleswig Holstein collapses Spain's strategy against Catalan separatism
  • On the implausibility of conspiracy theories in the Skripal case
  • March 07, 2018
  • The PD - so much like the SPD
  • Why the EU is right to blackball the City of London
  • Car companies don't deliver on diesel upgrades
  • February 05, 2018
  • How big is Germany's external surplus, really?
  • Macron's first election test
  • Coeure's endorsement of a fiscal union
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • November 30, 2017
  • Please tell us there is another way than fudging the border
  • Could Gentiloni remain prime minister beyond the elections?
  • Stage set for Babis minority government
  • November 03, 2017
  • Catalan separatism is energised again
  • A prime minister without a party
  • Northern Ireland - handle with care
  • The death of liberalism
  • October 09, 2017
  • UK is starting to prepare for a no-deal Brexit
  • Why Germany will resist meaningful eurozone reform
  • September 14, 2017
  • Bravo Mr Juncker
  • ... what he said about the labour market
  • ... and what his speech means for Brexit
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 25, 2017
  • The impact of Duda's veto
  • How to undo Brexit
  • Front National: Frexit or not?
  • July 03, 2017
  • Can Greece exit its programme without a credit line?
  • The softening Brexit
  • Macron's state of the nation address
  • June 12, 2017
  • Not strong perhaps, but stable
  • Catalan independence, a mental state
  • May 22, 2017
  • Catalonia's independence blueprint
  • Commission wants completion of eurozone by 2025
  • The case for more honesty about the abolition of cash
  • The case against an Italian euro exit
  • May 02, 2017
  • An accident waiting to happen
  • Matteo Renzi wins PD primaries
  • So much for the Schulz effect
  • April 15, 2017
  • Happy Easter
  • March 29, 2017
  • B-Day
  • Wargaming Catalan independence
  • Macron's strategy for the legislative elections
  • March 13, 2017
  • Poland and the future of the EU
  • Polls show 40% support for Costa's Socialists
  • Council of Europe questions Spanish constitutional court reform
  • February 27, 2017
  • May’s next gamble
  • Macron and the rise of the centre
  • Bite the bullet and get on with it
  • Who is the AfD?
  • February 13, 2017
  • What decides the French elections: cult or programme?
  • Sense and nonsense on globalisation
  • Towards the next European crisis
  • January 30, 2017
  • On the illusion of choice
  • January 16, 2017
  • Trump doubles down against the EU
  • Fake maths
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • December 14, 2016
  • Towards the next Italian referendum
  • Austria blocks declaration on Turkey
  • How to avoid exposure and be popular
  • Can Putin topple Merkel?
  • So much for Germany as world leader
  • December 06, 2016
  • Doubling down in Rome
  • On the Supreme Court's Brexit case
  • When a refugee commits a murder
  • November 28, 2016
  • And now what Monsieur Fillion?
  • The inescapable logic of an interim agreement
  • On Germany's foreign policy post-Trump
  • How to lose against the populists
  • November 21, 2016
  • Merkel IV
  • Erdogan increasingly alienated from the West
  • EU may force a hard Brexit
  • The day after
  • November 15, 2016
  • Is the EU's global strategy paper really our response to Trump?
  • President Steinmeier
  • Are journalists to blame?
  • March of the pro-Russians
  • November 11, 2016
  • What Trump means for Europe ...
  • ... for the economy ...
  • The new era of chaqu’un pour soi
  • November 07, 2016
  • Why UK elections are becoming more likely
  • The EU's moral bankruptcy on Turkey
  • Merkel's presidential mess
  • The case for a No vote in Italy
  • November 04, 2016
  • An important decision, not a critical one
  • Europe and Catalonia at the centre of Rajoy's new cabinet
  • Turkey threatens to end refugee deal
  • Everyone against Sarkozy
  • November 03, 2016
  • The UK's High Court rules today
  • Merkel's Turkey nightmare
  • November 02, 2016
  • How not to address the rise in populism
  • German Social Democrats - the defenders of Putin's interests