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November 17, 2016

Sarkozy's Brexit plan

Nicolas Sarkozy has a comment in the FT, in which he sets out a good series of proposals for the eurozone, and the EU's future relations with the UK. It is only shame that he did not make those proposals when he had the chance to do so. In this article he covers both the future of the euro, and the future of Brexit. On the euro, he writes, that more political integration is needed - though his vision appears to us as rather short-sighted. The EMS needs to be developed into a European monetary fund, the eurozone should be given its own secretariat with the goal to drive integration forward. 

"The Europe of the euro needs to deepen its integration, under sound economic governance, once and for all. The foundation for this was built during the crisis in 2010-11, when the European Stability Mechanism was created and eurozone summits began. This Europe needs to take a few steps further, providing more permanent leadership for its eurozone summits, setting up a central secretariat to serve as Europe’s treasury, and turning the ESM into a fully fledged European monetary fund. The other Europe, the 27-member union, should revert to its original intent."

On Brexit he writes that the result from the referendum needed to be accepted. While this seems to be a rather conventional statement to make in the UK, it is considered wildly eccentric outside the UK with intense coverage of Bregret or Bremain type scenarios. 

Peter Foster has a good analysis of where we stand with Brexit. He writes in the Daily Telegraph that the only way to square the various positions of the UK is an eventual free trade agreement with deep service sector chapters. All these need to be flashed out, or carved out, as Foster calls it, and this is what most of the negotiations will be about. He writes that several barriers need to be surmounted, but this does not mean that they unsurmountable. He said two factors weigh on the process. One is technical, the other, and more important one, is political. If the mindset in the EU is one of penalising Britain, then the Brexit will become correspondingly hard. Foster urges all sides to refrain from megaphone diplomacy (we presume he has Boris Johnson in mind in particular, who ability to produce silly outrages seems unaffected by him having become foreign secretary). 

The FT, meanwhile, reports that Theresa May and her government are already preparing for the eventuality of a defeat in the Supreme Court. In that case, the government plans a short bill, with a single paragraph only since the shorter the bill, the harder it is to amend. The key parliamentary group is to decide on the fate of Article 50 is the Labour Party, given the Conservatives narrow majority, and deep splits. While some Labour MPs, from London for example, will not support an Article 50 trigger, the paper has talked to one senior Labour source as saying that the party would not fight hard to prevent or amend Article 50. We want to move on and put it in the category of things past, the source said.

And, finally again, there is some evidence that Twitter in particular has impacted the Brexit referendum. Giuseppe Porcaro and Henrik Muller looked at 890,000 tweets and concluded that, as a form of agenda-setting elite media, they are far more effective in referendums than during normal elections because of their ability to shift voters in one or the other directions right up to voting day. They are particularly effective in referendums where large portions of voters are initially undecided. That was clearly the case with Brexit. 

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November 17, 2016

Freedman on Trump

We really like the headline of Lawrence Freedman's essay on Donald Trump: "Attention, US Allies: This Is Not a Drill". Freedman gives a realistic assessment of what to expect - and fear - and what not to expect from the next US president. What matters most, he writes, is not so much what he plans to do, but what he will do when faced with a sudden crisis and the need to make fast decisions. These could be crisis of national security, or an economic crisis. Trump's nationalist and protectionist instincts would most probably work against the interests of the international community. Friedman writes that TTIP is dead, and that TTP will also most likely not survive a Trump White House. As for Nato and other formal alliances, the threat is not formal abandonment but atrophy. They may end up being drained of all meaning. This may become apparent as Trump forges a close working relationship with Vladimir Putin, who is likely to demand a price for his support of Trump (and his help in getting him elected). This price could come in the form of an end to sanctions, support for the Syrian regime, acceptance of the annexation of Crimea, and acceptance of Russian involvement in eastern Ukraine. Freedman points that this policy will hit its limits fairly soon. For once, the US Senate still has a majority that is anti-Russian. And the interests of the US and Russia do not align nearly as much as Trump thinks. We think the impact of the Trump presidency is likely to be felt most strongly is Europe.

"There appears to be a real risk in the European Union that the set of arrangements that has long served the continent well may be starting to unravel. This can’t be solely attributed to Trump. It is more that his victory has thrown into sharp relief not only their insecurities and frailties but also their failures. The idea of the “West” as a dynamic and benign force in international affairs has lost its credibility, and its political class is now treated with suspicion. There are reasons for populist mistrust, including the lingering impact of the 2008 financial crisis and the belief that ordinary people suffered while those responsible survived unscathed; the consequential struggles of the eurozone; the aura of failure surrounding the interventions in Iraq and Afghanistan; the continuing threat of Islamist terrorism; and the tensions caused by mass migration."

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