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August 25, 2017

Whatever happened to red-red-green?

When Martin Schulz returned early in the year to a Germany he hardly knew, the SPD's poll ratings improved dramatically for a short period. At one time the polls suggested that a combination of SPD, Greens, and the Left Party, would have a majority - red-red-green as this is called in Germany. After three lost state elections and a sustained fall in the poll ratings of the SPD, this option is no longer on the table. In the absence of a political earthquake the German elections are no longer about who will be the next chancellor, but about whether Angela Merkel will govern again with the SPD or the FDP.

FAZ has a good political analysis of the short red-red-green honeymoon. There were sections in the Left Party who always supported the option, and back in January even the hard-left faction led by Sarah Wagenknecht toyed with the idea because Schulz started his campaign with an emphasis on social justice. This openness lasted until about April, well after the loss of the state elections in the Saarland where the three parties failed to form a coalition because the Greens did not make it above the 5% threshold. The interpretation of the Left Party was different from that of the SPD. The Left Party said that, if the Greens had achieved a 1% increase in the votes, there would have been a solid majority. The SPD, and Schulz himself, instead concluded that they must move away from the red-red-green option, which Schulz subsequently did.

The Left Party pointed out, correctly in our view, that the SPD's prime minister in North-Rhine Westphalia ruled out a red-red-green option and still lost. The Left Party accused the SPD of accepting the CDU's own interpretation of the Saarland result in its rejection of red-red-green. That event led to the return to the status-quo-ante in the relationship between the two parties, with the Left Party fiercely criticising the SPD's support for military action in Syria and for what the Left likes to call neoliberal policies.

But there is also a political problem for the SPD. The Left Party is in some respects too right-wing. It has lost voters to the AfD, and Wagenknecht in particular has accepted that the AfD has a genuine argument about immigration. The SPD supported Merkel in her open immigration policies, but the left wing of the Left Party is aligning with the AfD on this issue - a clear no-go for the SPD. 

Meanwhile, there has been a small shift in the polls in favour of the AfD. The party's downward trend seems to have reversed according to the latest ARD Deutschland Trend poll, which has the AfD up from 8% to 10%. This would make the AfD the third largest faction in the Bundestag.

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August 25, 2017

Reshuffle - Greek edition

There has been renewed speculation that Alexis Tsipras plans a government reshuffle in the autumn. And the name of Euclid Tsakalotos is being mentioned again. Both the prime minister’s office and the finance ministry denied that Tsakalotos is to leave his post after the press suggested otherwise. According to Ta Nea, Tsipras wants to give Tsakalotos another role, but Tsakalotos let Tsipras know that he either remains in the finance ministry or leaves the government. Why would Tsipras want to remove Tsakalotos? Ta Nea mentions internal party imbalances. We wonder whether it also has to do with Tsipras' latest narrative that the page has turned. The creditors surely don’t like it. There is too much going on with the third review, and the last thing needed is a new finance minister.

According to KT Greece one of the jobs offered to Tsakalotos as an alternative was to become coordinator for the so-called "productive ministries". This sounds like a demotion rather than a promotion to us. Even if Tsakalotos stays at the finance ministry, we wonder whether this is really the end to this story. Speculations about Tsakalotos’ departure came up already earlier this month, and the more intense the denials the more pressure builds up.

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August 25, 2017

Is the Norway option really dead?

We have been increasingly frustrated with the position taken by some of the former Remain supporters in the UK, especially their persistent support for a second referendum. There is now a greater sense of realism. We liked the column in the Guardian this morning by Martin Kettle, who writes that the latest fall in net immigration - down by 81,000 from last year's 327,000 figure - changes the politics of Brexit. He does not mean Brexit itself, but the form it should take.

We note that the fall in immigration is due to two factors: the more important one is the fall in sterling against the euro. It has simply become less attractive for many EU citizens to work in the UK and send money back home. The second effect, more marginal in our view, has been Brexit itself and the uncertainty over permanent residency rights. Kettle's point, however, is that the fall in net immigration changes the politics of Brexit in the UK, and makes the EEA option relatively more attractive.

Kettle notes that the UK's position papers on various Brexit-related issues were drawn up in a spirit of future cooperation between the UK and the EU. 

"In every case, the papers start from the reality of the Brexit vote and then gently proceed to undermine it. None makes the case that Britain should turn its back on the EU, as the Brexiteers would like. None heads off into the fantasy world in which nations, dazzled by British exceptionalism, queue up to make bilateral deals with Liam Fox. Instead, all seek to retain large parts of the cooperation and openness that Europe has given this country."

Kettle argues that the net immigration numbers undermine Theresa May's case for a hard Brexit. We would argue this slightly differently: the fall in net immigration provides more room for a compromise over the future immigration regime, and over the nature and length of the transitional period which will be very similar to EEA membership. Kettle argues that there is a pro-Brexit majority in the UK but the politics is shifting, not towards pro-Remain but towards a soft Brexit.

A formal change in the negotiating mandate is unlikely. The solution lies in the transitional period. The period needs to be formally capped, for both legal and political reasons, but a three-year transition would allow enough time for a deep agreement on trade and political co-operation that would formally fall short of the EEA, but in practice would leave the open the possibility of future EEA membership if that became desirable. The fundamental problem with the EEA is that it is an inferior option to full EU membership because of the loss of political influence. We therefore still think the most realistic option is a deep FTA following a long transitional period.

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  • Macedonia - a deal hailed internationally and challenged at home
  • Macron - elusive to the left
  • What did Theresa May concede?
  • May 22, 2018
  • A €60bn ESM credit line - is this what they call a backstop?
  • Will Nato survive Trump?
  • Northern Ireland's Brexit disillusion
  • Would Corbyn become prime minister if he accepted the single market?
  • April 30, 2018
  • Looming May protests against Macron
  • France has discovered the Laffer curve
  • An important resignation in the UK
  • April 09, 2018
  • Orbán gets his supermajority
  • Riding the wave of resistance
  • The EU’s self-defeating strategy
  • March 19, 2018
  • Waiting for Germany
  • Russia’s friends
  • Can the Commons force an extension of the Art 50 period?
  • February 26, 2018
  • Angela Merkel's cabinet
  • February 08, 2018
  • Could the Irish question still trigger a hard Brexit?
  • January 22, 2018
  • Carles Puigdemont's flying circus
  • Macedonia and the insurrection of Greek patriotism
  • On the real hurdles for Brexit revocation
  • And the satellites, too
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 11, 2017
  • A new era for the French right
  • Growing scepticism of a grand coalition
  • November 27, 2017
  • Will Northern Ireland scupper a Brexit deal?
  • Last-ditch effort to prevent Irish elections
  • Pressure on Wauquiez
  • 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
  • November 03, 2017
  • Catalan separatism is energised again
  • A prime minister without a party
  • Northern Ireland - handle with care
  • The death of liberalism
  • October 23, 2017
  • Macron's plans for the European Parliament
  • First phase of Brexit negotiations in final stretch
  • Why the left hates Europe
  • October 11, 2017
  • A parliamentary coup in Italy
  • 1.7% UK growth forecast - not great, but hardly a meltdown
  • Could Tsipras' controversial gender bill split the coalition?
  • 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 25, 2017
  • Where does this leave eurozone governance reform?
  • Is Mélenchon losing his momentum?
  • Lost in Florence
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • September 13, 2017
  • Why the Turkey negotiations will continue
  • September 08, 2017
  • SPD keeps sliding
  • Macron in Athens: symbolism over substance
  • The main Brexit battle lines run through the Tory party
  • September 04, 2017
  • Dutch referendum: never again?
  • Why trade unions stay quiet on French labour reform
  • 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
  • August 29, 2017
  • The deep significance of Labour's Brexit U-turn
  • The day after the SPD loses