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December 02, 2016

Austria's Trump-Clinton moment

As Helmut Kohl knew better than anyone else, small countries matter in the EU and should be taken seriously. But, in view of last night's debate between the two Austrian presidential candidates, we have to admit that we find it hard to apply that principle ourselves, and even to relay the content of the debate with a straight face. 

The Austrian presidential elections are clearly the second most important vote on Sunday. A No vote in Italy would have far more immediate consequences for the EU (as would a Yes vote) than the rise of Norbert Hofer of the far-right FPÖ to the Austrian presidency. We should, however, not underestimate the importance of a victory of another Trump-style candidate in a central European country. Hungary and Poland have already gone down that route and, while Slovakia has nominally a government of the centre-left, they, too, are in the populist camp. The opinion polls published before this repeated run-off were inconclusive. Most had Hofer ahead by a tiny margin, and the last one we saw reversed the result with a slight advantage for Alexander van der Bellen, the Green candidate. But the gap in each of the polls was within the error margin, so the polls tell us little.

Sunday's repeat run-off became necessary because the second-round vote in the summer, narrowly won by van der Bellen, was declared invalid by the constitutional court. Austria's Der Standard talked about last night's TV duel between the candidates as the "presumably last one" - maybe they are expecting another legal challenge. The debate itself was similar in style as those between Donald Trump and Hillary Clinton. Hofer accused van der Bellen of being a spy - because he read that in a book, and since van der Bellen never sued the author, the information must therefore be true. Hofer was equally pathetic when he boasted that he, if elected, would get an invitation from Trump - unlike his opponent. And the two also clashed over whether or not van der Bellen would appoint a FPÖ-led government at the next parliamentary elections, scheduled for 2018. The Green candidate retracted from his earlier statement that he would not, and said instead that he would try to appoint a pro-EU government. 

So, who won the debate? There were no polls, but we noted a comment by a media analyst in Kurier, who said van der Bellen gives honest answers but comes across as a university professor, while Hofer has a more direct appeal. 

The Austrian president has no direct political powers, which is why much of yesterday's debate is meaningless. But the president has the power to dismiss the government and call new elections, as well as the powers to refuse to appoint a democratically elected government. We think there is a high probability of an FPÖ-led government in Austria in 2018, at which point there must be legitimate doubts about the country's continued willingness to remain a member of the EU. Hofer said he favours more direct democracy - through referendums - and we all know where that ends. The importance of this election is thus indirect. It is a signal - albeit an important one.

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December 02, 2016

The grand coalition that dare not speak its name

That time puts everyone in their place was often said in the parliamentary debate prior to Mariano Rajoy's appointment as PM. And it has taken a little over a month. Enric Hernández observes in an editorial for El Periódico that PP and PSOE have changed the stances they adopted then. The PP is no longer demanding a blank cheque from the opposition, and the PSOE has forgotten its "no is no" to Rajoy's budget. Apart from the broad brush agreement on the 2017 budget which we reported yesterday, PP and PSOE have also agreed a raise of the minimum wage - more modest than that demanded by a resolution passed earlier at Podemos' initiative. As much as Rajoy may be proud of his legacy, if the PP does not agree to reform controversial laws from the previous parliament such as the public safety law (nicknamed 'gag law') or the educational reform, the opposition will do it for them. The PSOE is increasingly comfortable in the role of "responsible opposition", leaving out of play the liberal party Ciudadanos, whose votes were useful to force the hand of the PSOE for Rajoy's appointment but are unnecessary if the PSOE plays along with the PP. Podemos, which wanted to lead an aggressive opposition to Rajoy's government, will have a harder time if the PSOE manages to tweak the government's policies in a more leftish direction. And the regional nationalists will have to decide whether to take part in preparatory work on a constitutional reform, which the PP has also accepted as inevitable, given that most of the opposition will support the PSOE on this. 

As noted, a week after the parliament votes a resolution by Podemos asking the government to raise the minimum wage by 22% in 2018, and by 45% by 2020, the PP and PSOE have surprised everyone by agreeing an 8% raise next year. Part of the reason Podemos' resolution was about 2018 is that an immediate minimum wage raise would have a budget impact in 2017, allowing the government to veto it. But the government can agree its own version of a minimum wage increase with the PSOE. The trade unions welcome the measure but they, too, have been caught out of step and criticise that the raise has not been negotiated with unions and employers.

Parliamentary arithmetic is stubborn. The viable majorities in the Spanish parliament have been PP+PSOE and PSOE+Podemos+Ciudadanos since the general election nearly a year ago, and the repeat elections did not change this. This is reflected in this new political dynamic where either the PP agrees policies with the "responsible opposition" of the PSOE, or it concedes reforms where Podemos and Ciudadanos can agree, such as on civil liberties and institutional reform.

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December 02, 2016

High tensions between Greece and Turkey

Tensions between Greece and Turkey continue to rise with Recep Tayyip Erdogan staking claims to hundreds of Greek islands and disputing Greece's sovereignty and related rights in the Aegean sea. The latest spat was provoked by the Turkish foreign minister over the Greek islands of Imia, a pair of small uninhabited islets in the Aegean Sea, saying that Imia was in fact Turkish land. His remarks drew a stern response from the Greek foreign ministry, which described them as “irresponsible and provocative".

A dispute over Greece’s Imia islets in the eastern Aegean almost led to a military skirmish between the two countries in 1996, 

Turkey’s provocations in recent days have not only been verbal, as there have been frequent violations of Greek air space over the Aegean. Greek diplomatic sources on Thursday attributed the spike in Turkish aggression to the insecurity of the Turkish administration after the failed coup in July.

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