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December 21, 2016

A culture of denial

As we predicted yesterday, the discussion about the terror attack in Berlin has turned political very quickly, with some commentators now wondering openly whether this might cost Angela Merkel the elections.

This is at its most fundamental a story about denial. The German establishment, and their friends in the media, are in denial that Merkel's government catastrophically mishandled the refugee crisis, in a way that this is now becoming increasingly apparent with a terrorist still at large in the streets of Berlin. And the German police and security services are in denial that they are facing an elevated threat during an election year. 

The German media have been absolutely awful in their coverage of the attacks. You found more useful information in Corriere della Sera and other European media. However, there were two perceptive commentaries in Frankfurter Allgemeine Zeitung, both of which go to the core what is happening in Germany. Berthold Kohler, the paper’s political editor, says this terror attack is to some extent self-inflicted. By opening the borders without checks, the German government brought about a generalised loss of control which is now felt among the core electorate of both coalition parties. The New Year's Eve attacks by North African immigrants on women outside Cologne train station - with the police refusing to get involved for political reasons - was a warning shot. The attacks in Berlin are much more serious. The following is our translation:

“The policy establishment and the churches are reacting now as they did then with the usual reflex that says: One should never subject refugees or Muslims to a general suspicion. But who is doing this? The progressive polarisation of society and the radicalisation of the debate will only be contained if you stop euphemisms and denials at a point when you can no longer credibly distort the facts. This is what drives people who are themselves not radical extremists to the populists.”

We noted that a reader complained yesterday that we criticised the German press for failing to call the terror attack a terror attack - and for pretending that this may have just been an accident. We stick by these criticisms because it is not the job of journalists to wait until they get official confirmation but to find out what is happening. The fact that this was a terror attack was established very quickly. If one had listened to eyewitness accounts in foreign media on the night of the attacks - which were not broadcast in the German mainstream media - there would have been no doubt. Just as there was no doubt in Nice after the attacks on July 14. This is what Kohler is talking about - a culture of denial. German journalists are afraid of reporting a terror attack, fearing that the act of the reporting might get people to draw the wrong conclusions and form racial or religious prejudice. 

FAZ had another perceptive commentary this morning by Michael Hanfeld, who writes about the "accident that turned out to be an attack". He said the silence of the German media was so penetrating that night that it made your head shake. He noted that CNN, Al Jazeera, and a couple of German private stations, got the news out pretty quickly with the correct interpretation, while the German public broadcasters reacted with an absurd degree of calm. The attitude was one of wait-and-see. They were talking endlessly about speculation, admonishing viewers that it was wrong to speculate, as it would only produce disinformation. Even worse, Berlin’s mayor thanked the media the next day for having interpreted the facts correctly. Probably the single most absurd case of denial is a Twitter hashtag #katzenstattspekulationen where readers exchange pictures of their cats so they don’t have to occupy their minds with needless speculation about what might have happened in Berlin.

We are focusing on these aspects of the story because they tell us that German society is emotionally not equipped to deal with what is happening. And this constitutes a massive factor of uncertainty that will dominate Germany politics during the election year. Merkel is right in one respect: the elections will be no cakewalk for her.

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December 21, 2016

Ukraine agreement hangs in the balance

The Ukraine association agreement is closer to ratification after the green left GroenLinks changed its stance and endorsed the declaration that Mark Rutte extracted from the European Council addressing the perceived concerns of Dutch voters. GL joins the left-liberal D66 in supporting the government coalition of right-liberal VVD and labour PvdA on the declaration, but that is still not enough for passage in the Eerste Kamer (the Dutch senate). The four GL senators plus one independent bring down the number of votes the government needs to just two. These might come from the small christian parties CU and SGP, or from the mainstream christian democrats of the CDA. Party sources tell Telegraaf that at least two defections can be expected in the senate, guaranteeing passage, but the official position of the CDA is still against ratification of the association agreement. In the Tweede Kamer (lower house) the Dutch government has a slim majority even without D66 and GroenLinks, so the CDA is free to stick to its principled opposition to overturning the will of the voters. With the present threat of failure in the senate, however, the CDA's position led to an acrimonious exchange with Mark Rutte in the lower house debate yesterday. The CU and SGP said they also don't support Rutte's solution.

A background piece in NRC quotes PvdA (labour) MP Niesco Dubbelboer, who co-sponsored the legislation establishing consultative referenda in the Netherlands of which the Ukraine association agreement is the first instance, suggests that one way out of the impasse is to hold a second referendum on the association agreement augmented with the Council's declaration. This would be analogous to the earlier cases of Ireland and Denmark, where after a no vote the countries got concessions which then led to yes votes in repeat referenda. Despite the Council's declaration, the debate in the Netherlands continues to revolve on whether ratifying the agreement would be a betrayal of the contract between voters and their elected representatives which is the position taken by the Christian parties CDA, CU, and SGP. Even though the referendum was consultative, political parties raised expectations during the referendum campaign that the result would be respected. 

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December 21, 2016

Valls U-turn on 49-3

The latest proposal of Manuel Valls to abolish article 49-3 of the constitution, allowing the government to push through a bill without consent from parliament, looks pretty cynical as he made use of it six times during his time as prime minister. But there is strategy behind this. We are just not convinced that it will work.

By turning against an executive tool he is so hated for, Valls wants to reach out to left-wing voters who never forgave him for crushing dissent with this authoritarian action. But so far this had no effect. Christian Paul, the leader of the "frondeur" rebels, still wants to see Valls' back even more than before. Valls' proposal was also mocked on social media and in newspaper cartoons. The assassin always seeks to get rid of his weapon, comments @LANDEYves. Quotidien (@Qofficiel) wonders whether Valls is ready to resort to 49-3 in order to abolish 49-3.

Valls' campaign manager Didier Guillaume defended his proposal on RTL yesterday, but was unconvincing. Guillaume said Valls did use 49-3 not six but only two times, and that essentially he had no choice when faced with those party rebels, writes l’Express. That does not sound reassuring. 

Myriam El Khomri, Valls' labour minister whose labour reform alone had to resort to 49-3 three times, said last night that Valls' proposal was not cynical at all. He learned a lesson after receiving a deep wound. She said that this episode taught them that 49-3 no longer responds to the democratic expectations of the country, according to Marianne.

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December 21, 2016

Beware of exotic Brexit options

We would urge our readers to dismiss the long discussions about exotic Brexit options. The reason is that they are too complicated to implement, and impossible to agree within the given time frame. And nothing is more exotic than the idea of a partial customs union or the idea, as discussed in the UK yesterday, of Scotland remaining in the single market while England does not. Charles Grant does a good job dismissing these suggestions. He cites a number of reasons such as a Spanish veto, but there are several others. Moreover, it would be a nightmare to implement and would probably require a customs border.

The same holds true, by the way, for Northern Ireland. Grant says, rightly in our view, that there will have to be a customs border between the Republic and Northern Ireland once Britain leaves the customs union (which may be only after a transitional period). British officials are trying hard to find a way to avoid this, but they haven't found a way yet. These controls might be light - similar to those that operate on the Swiss border with neighbouring EU countries. But these are customs borders, and invariably involve paperwork.

Judging by the way the discussion is going now, it would be reasonable to expect that the UK - the whole of it - will formally leave the EU in July 2019; that it will remain a member of the customs union but not the single market for a transitional period of a length yet to be determined; and that the UK - as a whole - would leave the customs union after an FTA is agreed. Scotland will remain part of the UK, and there will be no special regional deals.

Ireland's post-Brexit situation is probably not sustainable. Brexit could lead to Irish unification (within the EU and the eurozone), or alternatively to an Irish exit from the EU, which could leave current arrangements with the UK broadly as they are now, post-Brexit. For us the question will depend on the extent to which the EU can succeed in challenging the Irish low-tax business model, as it now clearly does. If this model is no longer seen to be viable, we would expect to see an Irish debate about the country's strategic options.

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