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July 13, 2017

Renzi at war with everybody

After Matteo Renzi lost his referendum last December, there have been two conflicting narratives in Italian politics about what would happen if the government under Paolo Gentiloni went on all the way to the end of the term in 2018. The first narrative said a long interregnum would heal the divisions within the Partito Democratico, and could help get the PD back into power. The alternative view is that it would give the PD enough time to hack itself to pieces. The last few days have shown that the latter narrative was the right one. The beneficiaries are Silvio Berlusconi’s Forza Italia and the Five Star Movement. 

We already reported on Matteo Renzi’s broadside against the EU’s fiscal compact, which he promised to bury when re-elected, along with the other fiscal rules. There has been a lot condemnation of his statement, both from the EU and from within the Italian government. Yesterday, Renzi doubled down when he published a book containing an extraordinary attack on his predecessor Enrico Letta. The book says that, when former president Giorgio Napolitano invited him for dinner, he got the impression that the president did not see Letta as a legitimate prime minister because he had not subjected himself to any political process. He had no seat in parliament, and had won no primary. The only time Letta stood for elections was in the 2007 primary, where he ended up with 11% of the votes.

Corriere della Sera has a nice article about the reaction by Letta, who was so shocked that he initially did not know what to say, preferring silence as the most effective tool against what he considers to be slander. However, he ended up saying that Renzi managed to isolate himself within the party, and is now embarking on a quixotic campaign that will end up strengthening Matteo Salvini, Beppe Grillo, and Berlusconi, the leaders of the various opposition parties.

In a long analysis in Corriere della Sera, Massimo Franco quotes a senior PD source as expressing the fear that there is a danger of the PD splitting, a danger that Renzi underestimates. The party has survived the recent split of a group of left-wingers, but it would not survive another split ahead of the elections.

A critical test will come on November 5, with regional elections in Sicily. Renzi is already busy ridding the party of disloyal regional chiefs. This will be followed by a process of drawing up lists for the national elections, as Renzi already indicated he wants people on those lists that support him. A bitter conflict is raging within the party at both regional and national level.

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July 13, 2017

Referendum game gets real for Catalan government

We have commented on occasion that, for all the wrangling around the Catalan independence movement, it's all fun and games until there is an executive order that is contrary to the law, and that has not happened yet. The Spanish government's strategy is to contest everything in the courts, notably the constitutional court, but we found it questionable, for instance, whether a parliament's political motion without legislative content can be unconstitutional. Similarly, the only thing that has happened in relation with the planned unilateral independence referendum on October 1st is the introduction of a draft law into the Catalan parliament. The act of introducing legislation cannot be unconstitutional. So, we're still waiting for the moment when the Catalan regional government commits an illegality. This may happen soon after the referendum law is passed and its constitutionality is challenged, if the Catalan government were to ignore a court injunction suspending the law. But we're still not there.

And yet, the proximity of the point when the Catalan regional government will be forced to commit an illegal act is already causing tensions within the regional government. In an editorial at La Vanguardia, Lola García describes a Catalan government on the brink of implosion. 

There is a bit of jostling for position for the day after the referendum. There is a very real possibility that the independence movement will culminate in just another round of regional elections under Spanish law. But some of the members of the Catalan government might by then be barred from office for having violated the constitution or a constitutional court injunction. This has already happened to former Catalan premier Artur Mas and some of his former cabinet members, notably Francesc Homs who had to leave his seat in the Spanish parliament a few months ago as a result. So far, only members of PDECat, the party of Mas and the current regional premier Carles Puigdemont, have been barred from office. And members of the party in the current regional government worry that their coalition partner ERC might manoeuver into a situation where PDECat is decapitated by the Spanish courts and ERC emerges unscathed. ERC already leads in the electoral polls by a wide margin, in a reversal of the historical position of the two parties. The PDECat would like Oriol Junqueras, ERC leader and deputy regional premier, to take one for the team. But Junqueras is pushing for all of the cabinet to accept joint responsibility for the actions leading to the referendum.

But it's not only about being barred from office. Lola García notes that many leading members of PDECat are willing to sacrifice their political careers. The issue is sacrificing their assets. Even though the charge of misuse of public funds against Artur Mas and his associates was dropped by the courts, the Court of Auditors is still pursuing the issue with a view to recovering up to €5m euros spent on the organisation of a mock referendum in November 2014, by repossessing Artur Mas' assets. It's one thing to put one's career on the line, but money is one step too far.

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July 13, 2017

Going about the Irish border issue

The Irish border is one of the thorniest issues in the Brexit talks. According to Bloomberg, the EU and the UK have now decided to agree on broad principles  in the coming months (going beyond what Theresa May already outlined) and leave the details for later, after the ultimate trade deal between the two sides is clearer. David Davis said a full plan for the Irish border is unlikely until the end of the negotiations. The 500km-long border between Ireland and the UK would become an outer border of the EU once the UK exits the union, and customs controls would have to be introduced. 

The Irish government spent months looking into technical solutions to minimise the disruption by border controls after Brexit. Under the new prime minister Leo Varadkar these efforts have become less prominent. The new prime minister´s preferred option is no border of any sort. Their reading of the UK election is that exit from the customs union is now less likely. The Democratic Unionist Party, which is supporting May’s minority government, has said it wants a frictionless border. But there are concerns from other EU member states. German officials questioned the need for a totally open border. The next round of negotiations between the UK and the EU starts on Monday. Michael Barnier said that the EU red lines are not yet fully understood in London.

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July 13, 2017

Brexit facts - who needs them?

We figure that at least 80% of the news stories and commentaries in the UK press about Brexit have their foundation in some fundamental misunderstanding about the Brexit process or EU law. The same goes for UK politicians on both sides of the debate. The British seem to exaggerate their own room for manoeuvre, for example on whether Britain can opt in to parts of the single market, or whether it can opt to stay in the customs union. None of this is possible now.

A very useful guide to some of the Brexit facts has been published by the European Commission, which has gone out of the way to present what we consider one of more impartial documents on Brexit we have seen. In the Q&A section it addresses the issue of whether Brexit can be revoked. Remainers in the UK believe that it can. But this document says that it can certainly not happen unilaterally, because Article 50 does not provide for it. We agree. If the UK wanted to revoke Article 50 it would require, at the very least, the consent of the European Council. And the European Council would almost certainly attach conditions to this, like an end to the budget rebate or an end to UK opt-outs from key policy areas - conditions that would clearly not be acceptable to the UK. Just imagine a scenario where you wanted to leave the EU, only to end in the eurozone and Schengen.

David Allen Jones, meanwhile, did a nicely brutal hatchet job on a Conservative Peer, who claimed that various third-country trade agreements were now "in the bag"

"Trade agreements between Britain and the US and Australia are not "in the bag". They are nowhere near the bag. The bag is not in sight, and it may never be.

There is no final agreed text for the agreements. There are no agreed provisions — there are no draft provisions even being discussed. There is no agreed scope for what the provisions in those agreements would cover. There is no list of heads of terms. There is no agenda for talks. There is no venue. There are no negotiating mandates. There are no negotiation teams. There is no lead negotiator. There is no letter of intent. There is nothing so far, but warm words."

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