We use cookies to help improve and maintain our site. More information.
close

May 02, 2017

An accident waiting to happen

Despite the extraordinary events following Jean-Claude Juncker’s dinner in Downing Street last week, we remain optimistic that a Brexit deal is still possible. The road to an agreement is unlikely to be straight, however, and it may be very noisy. Clearly there is the potential for a grand failure. 

The details of the dinner were leaked to Frankfurter Allgemeine Sonntagszeitung, which already tells us that they were not leaked from Downing Street, but either from Juncker himself or from the group of people he debriefed after his dinner, which included Angela Merkel. It was in response to that briefing that Merkel included a passage in her Bundestag statement saying that some people in Britain were delusional about the Brexit negotiations, a clear reference to May herself.

The paper quotes Juncker as saying that he was ten time more sceptical after the dinner than before, putting the possibility of failure at over 50%.

The areas of a disagreement are over May's insstence:

  • on a parallel negotiation of a free trade agreement;
  • that the UK owes nobody any money;
  • that Brexit should be a success - Juncker said that this was impossible (yes, this is how FAZ puts it);
  • to negotiate the rights of expats early on.

It is very clear that quite a lot of people are on a steep learning curve, including of course May. David Allen Green (@davidallengreen) made the comment that May’s home office background has made her averse to open negotiations. He also makes the point that May possibly does not grasp the complexity of the process at the EU level. 

The reaction by Downing Street was muted, but this will invariably be seen as an attempt by Brussels to influence the UK elections, and that alone will have a lasting impact. The indiscretion will almost certain harden the UK’s negotiating position, and accelerate work on a credible Plan B.

In this context we noted an interview by Ambrose Evans Pritchard with Yanis Varoufakis, who came to London to launch his book on the Greek crisis, and who had some helpful advice to May. We think it is worth quoting at length because there is a more than even chance that the UK government might see things the same way

“My advice to Theresa May is to avoid negotiation at all costs. If she doesn’t do that she will fall into the trap of Alexis Tsipras, and it will end in capitulation... The parallel with Brexit is the tactic of stalling negotiations. They will get you on the sequencing. First there is the price of divorce to sort out before they will talk about free trade in the future...They will give you the EU run-around. You won’t always know exactly who to talk to and that is deliberate.”

Jochen Buchsteiner und Hendrik Kafsack write in FAZ this morning that one of the problems for the EU will be a lack of solidarity among member states. Solidarity is still holding up, but this could end once the negotiations reach the stage of a Free Trade Agreement, as the British government will do its best to split the others.

Show Comments Write a Comment

May 02, 2017

Matteo Renzi wins PD primaries

It was not really a surprise that Matteo Renzi won the Partito Democratico primaries. The result is decent - he got 71% according to the latest count, as reported by Corriere della Sera, in contrast to 68% in the 2013 primaries. But this time there were fewer voters, just below 2m compared to 2.8m in 2013. We think these participation numbers are a good reflection of the countrywide fall in political support for both Renzi and his PD. Renzi's main opponent in the primaries, justice minister Andrea Orlando, got 21%; while Michele Emiliano, the governor of Puglia, only got 8%; the two claim that their share was higher, at 23/24% and 12% respectively. Corriere notes that Renzi’s support has weakened in some of the party’s core regions: Emilia-Romagna, Toscana, Piamonte, and Umbria, as well as in the cities of Genoa and Florence. 

There will be more analysis of the implications of the vote in the next few days. One of the important issues is the PD’s willingness to enter into formal or informal coalitions with other parties. There is a clamour among some party members in favour of a grand coalition with Forza Italia, Silvio Berlusconi’s party. Italy has no tradition of this type of coalition, but electoral arithmetic leaves little choice to such an alliance, given a voting system that is effectively purely proportional. The majority premium is largely irrelevant, as no party stands a chance of meeting the 40% threshold.

Show Comments Write a Comment

May 02, 2017

So much for the Schulz effect

The Schulz effect is clearly petering out in the German polls. The SPD is still well ahead of where it was with Sigmar Gabriel as leader, but the CDU/CSU have now once again firmly pulled ahead of the SPD. Here are the two latest polls, which show a surprisingly large degree of agreement:

in % Emnid Forschungsgruppe 
Wahlen
CDU3637
SPD 2929
Greens 78
FDP 66
Left Party99
AfD 98

If this was the result, only two constellations for a government would be possible: another grand coalition with the CDU and Angela Merkel as the senior partner, or a coalition of CDU, FDP and the Greens. The Schulz effect had two main components: the SPD benefitted from the return of disgruntled ex-voters who had deserted the party for the AfD; and the SPD benefitted from voters who used to support the CDU. The first group is still with Schulz, but the second is drifting back to Merkel. The Schulz effect was running largely on hot air - he has not committed himself on policies, still trying to be everything to everybody. He will have to come out and position himself. 

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • 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
  • 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
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • 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 31, 2017
  • Where are the Républicains?
  • Poland unmoved by EU rule-of-law sanctions
  • May will stay through Brexit, and then fight the 2022 elections
  • 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 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • 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 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
  • 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
  • September 25, 2018
  • Be careful what you wish for - second referendum edition
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • 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 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
  • June 20, 2017
  • How to soften Brexit?
  • The deep roots of Brexit: Thatcher and the Germans
  • 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 09, 2018
  • German panic about Target2
  • AfD level with SPD
  • How the EU could fail
  • May 31, 2017
  • Getting real in the debate on the euro's future
  • Russia's growing influence in Italy
  • 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 28, 2018
  • A no-confidence motion that could backfire
  • The political repercussions of a historic referendum in Ireland
  • Why the lack of an international role for the euro matters
  • May 10, 2017
  • PSOE primary campaign in full swing
  • Czech government crisis escalates
  • Backroom dealing on electoral reform in Italy
  • 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 13, 2018
  • German support for eurozone reform next to zero...
  • ... and no support for France on Syria either
  • A French sermon
  • Why the euro endures
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • 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 26, 2018
  • Angela Merkel's cabinet
  • March 27, 2017
  • Governing formation troubles - Northern Ireland edition
  • Did Trump present Merkel with a bill for Nato?
  • 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
  • January 08, 2018
  • Getting real on Brexit
  • Macron in China
  • March 01, 2017
  • The threat of Frexit
  • Fear and loathing of a referendum in Spain
  • How to get around Theresa May’s little ECJ issue
  • Solve the problem
  • 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 28, 2018
  • Urban politics and national crisis - the Irish case
  • How anti-semitism became one of the main issues in British politics
  • November 13, 2017
  • A pro-European list: Wauquiez' nightmare
  • Catalan separatism isn't going away
  • Why oh why does Germany behave the way it does?
  • Why the four freedoms matter
  • February 02, 2017
  • Will it come to the use of force in Catalonia?
  • The day Brexit became irreversible
  • Can Trump and May succeed?
  • 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
  • June 01, 2018
  • Will France and Germany stick together in their response to US trade tariffs?
  • From a eurozone budget to a slush fund
  • 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
  • September 27, 2018
  • Two ways out of the Brexit impasse
  • February 16, 2018
  • How big will the euro budget be?
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • November 30, 2016
  • Is Russia behind a massive cyber attack in Germany?
  • Will Fillon move to the centre?
  • The Dutch left field is getting crowded
  • 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
  • October 15, 2018
  • Black Brexit smoke
  • Bettel can relax and stay in office
  • Solving the crime vs solving the problem
  • April 16, 2018
  • Italy's and Germany's pained response to the Syria attacks
  • On the end of the eurozone's economic honeymoon
  • Why Bulgaria should stay out of the euro
  • Where shall we meet after Brexit?
  • October 16, 2017
  • What‘s the deep meaning of the elections in Lower Saxony?
  • Can Brexit be revoked?
  • Macron's grand narrative
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • October 20, 2016
  • No games please, we are Europeans
  • 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
  • October 12, 2018
  • A deal so close, and yet so far
  • AfD leaves Germans speachless and helpless
  • June 04, 2018
  • German discourse out of control
  • Wait for European disunity on US tariffs
  • January 24, 2018
  • AfD europhobe to chair of Bundestag's budget committee
  • Watch out for the Labour Party debate on the single market
  • On the productivity puzzle
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • May 12, 2017
  • What to do with Germany’s tax windfall
  • How Macron counts on building a majority
  • Options for the eurozone
  • 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
  • September 25, 2018
  • Be careful what you wish for - second referendum edition
  • August 23, 2018
  • Chancellor says No to Maas' one and only substantive idea
  • French households yet to see reduction in fiscal burden
  • July 25, 2018
  • Future of euro debate: can the ECB do the heavy lifting?
  • June 26, 2018
  • Could the Irish border issue trigger a no-deal Brexit?
  • Is Harley-Davidson's decision really a victory for the EU?
  • May 30, 2018
  • Italian pro-Europeans repeat UK Remainers' error
  • Commission shakes up structural funds
  • Democracy lessons from the Irish referendum
  • May 04, 2018
  • On the madness of Germany's investment cuts
  • Has Macron given up on eurozone reform?
  • April 09, 2018
  • Orbán gets his supermajority
  • Riding the wave of resistance
  • The EU’s self-defeating strategy
  • March 15, 2018
  • Miro Cerar resigns over railway
  • Taking on trade unions over the rail reform
  • How strong is the EU's solidarity with the UK really?
  • February 19, 2018
  • SPD divided over grand coalition
  • Wauquiez - the French Trump?
  • Why Brexit will be extremely hard to reverse
  • January 26, 2018
  • Will the prison strike turn the fate for Macron?
  • Destroying the constitution in order to save it
  • Will populism wane with the global recovery?
  • Issing on the coalition agreement
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 04, 2017
  • Can Brexit still be stopped?
  • Could Poland open up the Posted Workers Directive again?
  • Has the Bank of England solved the productivity puzzle?
  • November 13, 2017
  • A pro-European list: Wauquiez' nightmare
  • Catalan separatism isn't going away
  • Why oh why does Germany behave the way it does?
  • Why the four freedoms matter
  • October 23, 2017
  • Macron's plans for the European Parliament
  • First phase of Brexit negotiations in final stretch
  • Why the left hates Europe
  • October 06, 2017
  • Catalan parliament session suspended
  • Can Jamaica fail? (not the country)
  • Portugal to give tax relief to the lower middle class
  • Stagnant wages and Central European populism
  • September 20, 2017
  • AfD on the rise
  • Is this the end of the FN as we know it?
  • Refugees overflowing Lesvos lead to call for action
  • September 05, 2017
  • On the Turkish question
  • Macron's unemployment insurance reform, next?
  • Labour to vote against the Repeal Bill
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 31, 2017
  • Russia sanctions bill becomes US law
  • Spain's Guardia Civil in the eye of the Catalan storm
  • A grand bargain between France and Germany
  • July 18, 2017
  • Brexit biases
  • July 07, 2017
  • Is Emmanuel Macron just another Matteo Renzi?
  • The real obstacles to a Brexit deal
  • Why Nordstream 2 should be delayed
  • On why the G20 won’t solve the main problem
  • June 26, 2017
  • Brexit - the central case and the tail-risk
  • The German fear of Macron
  • June 15, 2017
  • The politics of Brexit
  • Assembly this week, senate in September?
  • Romanian government crisis refuses to go away
  • June 07, 2017
  • A majority for Macron's labour reforms?
  • Options for the future of defence
  • What happens to legal contracts after Brexit?
  • May 30, 2017
  • Beer tent politics - Merkel edition
  • Brexit arrives in UK elections
  • Rajoy clears budget hurdle
  • 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 17, 2017
  • Whither the Dutch coalition talks?
  • Is fiscal federalism necessary and sufficient?
  • What the UK elections will and won’t achieve for Brexit
  • May 12, 2017
  • What to do with Germany’s tax windfall
  • How Macron counts on building a majority
  • Options for the eurozone
  • May 08, 2017
  • A message of hope
  • Barnier's not so easily agreed Brexit principles
  • The rebirth of the paranoid conspiracy theory
  • May 05, 2017
  • Front National - thinking beyond Sunday
  • Tusk attacks Juncker over Brexit diplomacy
  • Extraordinarily ordinary
  • May 03, 2017
  • Brexit at €100bn now. Any further offers before the auction closes?
  • Is the IMF too optimistic about global growth?
  • May 02, 2017
  • An accident waiting to happen
  • Matteo Renzi wins PD primaries
  • So much for the Schulz effect