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May 09, 2017

Macron's first challenges at home

The two immediate challenges Emmanuel Macron is facing at home are resistance to his labour law reform intentions, and his need to reshape the political landscape to gain a majority in parliament. 

On day one after Macron's election, there is a first taste of resistance in the form of street protests against his labour law reforms. Labour reforms have been a particularly traumatic experience for the outgoing government. The El Khomri law, which provoked a nationwide protest by trade unions, was imposed by Manuel Valls against parliament. Now everyone is expecting or reminding Macron to do a better job. The radical trade unionists are taking to the streets, while the more cautious headquarters warn against implementing the whole agenda. Macron, who calls trade unionists partners, needs to prove that he can walk the line, engaging them in a reform they want to see abandoned altogether.

The second challenge is political. Reconciling and reshaping the political landscape was his message, but how? Before the elections he set clear conditions to stir up momentum behind him and to win a majority: those who wish to rally behind him need to give up their party membership and join his movement En Marche!. And he promised a balance between left and right, and between civil society and politicians. Now, one day after his elections, his movement is turning into a party, and the conditions of membership are becoming less stringent, writes Marianne. No longer do politicians have to give up their previous party membership to join La Republique en marche!, the new party that emerged from the movement En Marche!. Socialists, centrists, and Republicans, are welcome to join and can keep their affiliation. This is another way of putting pressure onto other parties, as they are the ones that do not allow a second party affiliation. There is also a more relaxed interpretation of what civil society means. Jean-Paul Delevoye from the party committee said yesterday that this could also include mayors and councillors, as long as this is their first legislative election. 

Several among the Republicans are interested. Those who are 'Macron compatible' will meet this week, writes l’Opionion. This younger generation of the Republicans either explicitly support the idea of joining Macron or are exploring the possibilities more discreetly. The main protagonists of this idea, among them Bruno Le Maire and Jean-Louis Borloo, seek to get many supporters behind their movement. Their motto that it is better to spend five years to rebuild the country than the party. But Macron has to assure them that the prime minister cannot be a Socialist. A centrist, yes, but no Socialist. 

One of the crucial question is about timing. If they were to jump off the Republican platform before the legislative elections, it would split the left wing of the party. If it happens after the elections in June, there would be less collateral damage. But the party’s hard line has so far not changed. François Baroin warns that whoever rallies for Macron’s movement will be excluded from the Republicans. Could this change, Just as it did for En Marche!, after the elections in June?

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May 09, 2017

Another reason why the AfD is weakening

The AfD has had a terrible last few weeks, and the choice of a new leadership duo for the coming federal elections is not going to bring relief. Neue Zürcher Zeitung reports (hat tip Tagesspiegel) that the new co-head of the party, Alice Weidel, is not paying taxes in Germany but in Switzerland, where tax rates happen to be a lot lower. Weidel is a business consultant, who used to be considered on the moderate wing of the party, close to Frauke Petry (we find it interesting that people now refer to Petry as moderate, given how she became party leader herself). This scandal is likely to have legs, in our view, also because of the way Weidel justifies it. Weidel lives in a gay relationship and defended her Swiss residence on the grounds that she considers herself as an endangered person, and it would thus be safer for her and her family to live outside Germany. This is not exactly the kind of thing the nationalistic voters of the AfD want to hear. NZZ quotes the tax administration of the Swiss town in which Weidel is registered that all taxation aspects of residency were covered - meaning that she is paying her income taxes in Switzerland. Tagesspiegel notes that Weidel is also registered at her parents' house in Germany, so it is unclear which is her first residence. When asked by dpa, the German press agency, to declare where she paid taxes, she refused to answer except to say that she is legally clear. Our instinct tells us that this is not going to end well. 

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May 09, 2017

The size of the Brexit exodus

There is more to the City of London's financial ecosystem than Banks. In a survey of 222 of the largest financial firms in the UK, Ernst and Young finds about a quarter have plans already to move staff as a result of Brexit. This is a 50% increase from the end of last year. Investment banks are ahead of other subgroups, with 45% of them reporting relocation plans. Only 27% of insurers and 23% of asset managers have made public statements about their Brexit plans. 

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May 09, 2017

Europe missing from Dutch government talks

Paul Tang, a Dutch labour MEP, has an op-ed in NRC lamenting the lack of discussion of Europe in the ongoing Dutch government coalition talks. The election victory of Emmanuel Macron at least promises to revitalise the debate on reforming the governance of the EU and the eurozone. Were Martin Schulz to become chancellor in Germany, the Netherlands would miss a beat as it did not have a clear position on the way forward for the EU. Putting Europe on the agenda of the coalition talks is necessary also to prevent divisions in a hypothetic government further on. Tang characterises VVD and CDA as taking a Hague-first position, whereas the D66 and GL take a Brussels-first position. Evidence for this is, for instance, D66's and GL's endorsement of Guy Verhofstadt's unabashedly federalism. VVD and CDA prefer the EU to concentrate on removing market barriers, but want to insulate domestic politics from EU influence. This is particularly striking for the CDA: the fact that the Christian Democrats control all three EU institutions: Council, Commission and Parliament does not prevent the CDA's leader Sybrand Buma from complaining about Brussels.

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