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February 03, 2017

The Schulz effect is getting huge

There is more evidence of a Martin Schulz effect, from another poll, by Infratest Dimap, which now has the SPD at 28%, up from 20% only two weeks ago before there were any rumblings of a Schulz effect. The rise in the popularity of Schulz has partially affected the CDU, which stands at 34%, down from 37%. The other party into which Schulz’ popularity is eating into is the AfD, which according to this poll has lost three percentage points.

As so often, the headline poll results are not the most interesting. The poll revealed that Schulz is more popular than Angela Merkel - which is genuinely new. If there were a direct election, 50% would vote for Schulz against 34% for Merkel. And 50% believe that the SPD should run the next Grand Coalition, while only 39% say the CDU/CSU should.

What these polls are telling us is that we should regard the result of the German elections in September as wide open. It is not a foregone conclusion that Merkel will win. The CDU/CSU’s overall 6pp lead is less than the shift in the SPD’s vote over the last two weeks. As with the French elections, the outcome of the German elections will depend on events that are yet to happen.

It is our view that the polls systematically overestimate the support of the CDU and underestimate the support for the AfD, so that the SPD has everything to play for. Schulz benefits greatly from his lack of participation in the Grand Coalition, thus not being  associated with its politics. Through Schulz, the SPD may be able to escape the curse of the junior coalition partner. But his lack of experience of German domestic politics could also prove to be a handicap during the campaign.

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February 03, 2017

The post-Brexit boom goes on and on and on

It is becoming increasingly clear that the pre-Brexit economic predictions were not innocent errors, but outright lies intended to manipulate a political debate. There was also a near 100% correlation with expectations that Remain would win the campaign, so that the lie would never be exposed. We cannot recall a single voice who said: hold on, what if we lose? Would our forecast not damage our reputation? 

The Bank of England was one of the cheerleaders of Project Fear, but also has been one of the first to show contrition, and has since reverted to honest forecasting. This is not the same as accurate forecasting. All it means is that your forecast is based on professional judgement, not political prejudice. Yesterday’s forecasts are in many ways extraordinary: 2% GDP growth for this year, and 1.6% and 1.7% for 2018 and 2019 respectively. There is, of course, the risk of a hard Brexit shock, a risk that is hard to quantify. Another interesting aspect of the forecast is the marginal downward revision of inflation - the forecast peaks at 2.7%.

The main reason for this upward revision lies in the government’s economic policy, and what one may call the Trump effect. We argued that the economic trajectory for the UK economy would depend less on Brexit than on the policies adopted by the UK, and the global environment. That prediction seems to be borne out.

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February 03, 2017

A correction on Catalonia

The way yesterday's article on Catalonia was worded gave the wrong impression that Mariano Rajoy had already issued an official warning to the Catalan regional government under article 155, and that the Spanish senate had already voted to authorise the suspension of the regional government. None of this has happened yet, but most major newspaper front pages carried the central government's threat to do so to stop a repeat of the 2014 independence vote.

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  • 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 16, 2019
  • What next, after EU sanctions Turkey?
  • What to make of Johnson’s four-point Brexit plan
  • Galileo fails, and nobody notices
  • March 04, 2019
  • Macron's two-month sprint
  • May's numbers are not there yet
  • Greening QE
  • On the "hope" of a rate raise
  • 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 29, 2018
  • Where is the opposition in France?
  • Scenarios and risks for Syriza over Macedonia
  • September 21, 2017
  • Time to get serious about Brexit
  • Would the FDP claim the job of finance minister?
  • The return of the ultra-right to German politics
  • 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
  • August 05, 2019
  • No deal first, elections later
  • Free movement of labour? Not for politicians
  • Europe already lost the digital battle
  • June 24, 2019
  • Economic reform has torn up the SPD - climate policy does the same for the CDU/CSU
  • Not intruding, not really
  • May 13, 2019
  • Brexit Party has already changed UK politics
  • Orbán visits Trump, after a very long wait
  • Le Pen's appeal to the PiS likely to fall on deaf ears
  • April 02, 2019
  • Meaningless II
  • What will come out of the grand débat?
  • February 22, 2019
  • The maths of a Brexit deal
  • Does public protest crowd out of climate change?
  • January 16, 2019
  • And now think about this standoff from the perspective of the EU
  • What can the French learn from Brexit?
  • 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 05, 2018
  • Macron trails behind Le Pen in European elections poll
  • How the CDU will organise leadership campaign
  • 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
  • August 28, 2018
  • Urban politics and national crisis - the Irish case
  • How anti-semitism became one of the main issues in British politics
  • July 27, 2018
  • Be careful what you wish for - trade edition
  • A test of Pedro Sánchez' majority
  • June 25, 2018
  • Trump's car tariff to come early
  • On the lack of a sharp focus in the eurozone debate
  • May 23, 2018
  • Mattarella’s limited options
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • March 26, 2018
  • On the run no more
  • Terrorist attack will challenge Macron
  • A double-whammy of geopolitical and financial uncertainty
  • February 26, 2018
  • Angela Merkel's cabinet
  • January 30, 2018
  • Will Puigdemont be Catalan premier today?
  • Some thoughts about the German car industry
  • A short note on Italian coalition maths
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 08, 2017
  • Schulz' Europe
  • November 15, 2017
  • A Christmas bonus for poor Greeks
  • Dim prospects of negotiated de-escalation on Catalonia
  • Macron's favourite to succeed Juncker - first round
  • On sovereignty
  • Gli Azzurri
  • October 24, 2017
  • Is Kaczynski tired of ruling behind the scenes?
  • An era of movements instead of parties?
  • On the decline of the traditional parties
  • October 02, 2017
  • Catalonia recalls EU and eurozone instability
  • French trade unions increase pressure over labour reforms
  • Watch out for a political accident in the UK
  • Municipal elections boost Portugal's Socialists
  • September 11, 2017
  • Turkey issues travel warning for visitors to Germany
  • How nasty is the AfD?
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 27, 2017
  • Löfven's move
  • The nearing end of petrol and diesel engines
  • Why a second referendum in the UK won’t happen, and why it would be wrong
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • June 21, 2017
  • Why has the SPD deflated?
  • Berlusconi’s strategy
  • June 05, 2017
  • What happens to Brexit if Labour wins?
  • What Russia wants
  • 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 08, 2017
  • A message of hope
  • Barnier's not so easily agreed Brexit principles
  • The rebirth of the paranoid conspiracy theory
  • April 23, 2017
  • The demise of the AfD has accelerated dramatically
  • On how France will need to confront Germany
  • April 11, 2017
  • What to expect, and not expect from Schulz
  • The view from Berlin
  • The view from Moscow
  • March 31, 2017
  • Will the AfD implode?
  • The parliament vs Dijsselbloem
  • March 22, 2017
  • The Brexit Timetable
  • On what can go wrong in the Article 50 process
  • 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
  • March 05, 2017
  • Poland vs Tusk
  • Juppé - a recovered candidate?
  • Will Italy leave the euro?
  • 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 20, 2017
  • SPD ahead of CDU/CSU
  • Fillon bounces back
  • The Brexit timetable
  • February 13, 2017
  • What decides the French elections: cult or programme?
  • Sense and nonsense on globalisation
  • Towards the next European crisis
  • February 10, 2017
  • Brexit realism
  • How not to attack the populists
  • On German hegemony
  • February 07, 2017
  • Insurrection in Romania
  • On how to confront Trump
  • February 06, 2017
  • The Schulz effect, mark III
  • Germany's two asymmetric shocks
  • A Brexit conundrum - or not?