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July 24, 2017

Macron's popularity falls amid more budget cuts

Emmanuel Macron’s popularity is falling sharply. The Ifop poll for Journal du Dimanche registered a ten-point fall in just one month. Only one other president, Jacques Chirac, lost as much in the third month of his presidency. There is still a majority (54%) satisfied with the president, but his popularity is below that of Francois Hollande or Nicolas Sarkozy at the same point in time. The decline in popularity is explained by the standoff with the military, the labour reform, and the back-and-forth about tax reforms. 

Will further reforms help or worsen his popularity? The main obstacle is actually an old problem: how to compile a budget that reduces the public deficit below 3% and still delivers promised reforms. All current obstacles are budget-related, notes Nicolas Beytout in l’Opinion. The conflict with the military was about expenses, the discontent of the mayors is about revenues. And the subject of the latest controversy, the cut in personalised household benefits (APL), is about spending cuts. None of these measures have been well explained on the campaign trail. Expect the fall in popularity to continue into the autumn. 

The latest outcry is about an announced cut of the personalised household benefits by €5 per month. The left came out strongly against this measure, accusing the government of offering tax reductions for the rich while punishing poorer households. The problem with this measure is that it is a flat spending cut that also hits poor households, the magazine Marianne points out. Of the 6.5m of households who received it, about 800,000 are students. And 48% of the benefit goes to households in the lowest 10% income bracket. The spending minister defended the measure by saying the previous government voted for the same measure but did not implement it. This provoked a strong denial by members of the former Socialist government, who insisted that their measure was tailored to hit only those households with at least €30,000 income, or those paying wealth tax.

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July 24, 2017

Orbán to support Polish government against EU

Predictably, Viktor Orbán pledged Hungary's support for the Polish government against EU threats to trigger Article 7 sanctions on Poland for threatening the rule of law. As any EU sanctions require unanimity in the European Council, this forecloses any EU action going further than condemning the Polish government. This weekend, there have been street protests against the judicial reforms undertaken by the Laws and Order (PiS) government in Poland. According to Rzeczpospolita the protests numbered in the thousands on Saturday and Sunday. The paper notes that the Polish left, which failed to get into the Polish parliament at the last elections altogether (even the Social Democrats failed to gain seats in the Sejm) is organising strongly around these protests. Among the demands of the protesters is the dissolution of the Sejm for early elections. Meanwhile, Jaroslaw Kaczynski, the PiS strongman, had strong words of disapproval for Polish president Andrzej Duda, saying that he had stabbed his own party in the back by threatening to veto the judicial reform unless the requirement to appoint Supreme Court judges was raised from a simple majority to three-fifths of the Sejm.

We think Poland, and not Brussels, is the proper place to fight the PiS judicial reforms.

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July 24, 2017

No exit from Brexit

There are an extraordinary number of articles in the UK press about an exit from Brexit. The most extreme comment is from Matthew Parris, a highly respected Times commentator, who wrote in the Specator:

"...there’s a slim chance the grisly Brexit project could yet pull through, and it’s right to acknowledge this."

Parris is a very typical specimen of pro-EU commentator in the UK. His extraordinary expertise on UK politics is matched only by his complete ignorance about the EU. He believes that the UK can not only decide what shade of Brexit it wants, but also that it can unilaterally decide to revoke it. Neither is true. 

Two comments over the weekend addressed this particular issue. Wolfgang Munchau writes in his FT column this morning that the EU’s legal position is that the European Council would have to assent to a revocation of Brexit. Munchau thinks the Council will most likely attach conditions that will be unacceptable to the UK: no rebate, early agreement on the post-2020 EU budget, change in domestic legislation that requires referendums for treaty change, possibly even membership of the eurozone. Another possibility is that the European Council may insist that Brexit proceeds, followed by re-entry negotiations under Article 49. Under that second scenario, Britain would lose all opt-outs.

Niall Ferguson comes to a similar conclusion in the Sunday Times:

"I was against Brexit a year ago, but subsequently came to the conclusion that it would be better for both the EU nations and the UK to get a divorce, for they want a federal Europe and we never did. Put less politely, they are prepared to put up with German predominance and we are not."

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