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August 30, 2017

What is the German election about?

The notion of first-world problems does not even begin to describe what the German elections are about. We have chosen not to bother discussing the campaign issues because they have largely not mattered. Nicolaus Blome notes correctly that Martin Schulz has not found any traction with voters yet, but suggests that this could still happen. Schulz has so far failed to challenge Merkel over immigration, which remains a concern despite the fall in arrivals. Another issue he has avoided is crime, especially the rise in burglaries. And he has failed to capitalise on the diesel scandal, especially so since a majority of potential SPD voters are defrauded consumers. Blome makes the point that all three are issues that fall under the broad category of social justice. Middle- and lower-income earners suffer harder from burglaries, cheating car companies, or immigration, than the rich. And social justice remains the one category where people rank the SPD above the CDU. The question is therefore whether Schulz will tackle these issues in the next four weeks, in which case the outcome of the election may well be more open than the polls currently suggest. Blome recalls the 2005 campaign, when Gerhard Schröder started out with a massive deficit in the polls but came within an inch of clinching victory.

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August 30, 2017

Who is Jens Spahn?

There have always been German politicians arousing greater interest outside their own country than domestically. We recall answering many questions by UK colleagues twenty years ago about the chances of Volker Ruhe to succeed Helmut Kohl - an idea that seemed utterly implausible within Germany itself. The same is true about Jens Spahn, who is making a name for himself as a conservative voice in Angela Merkel's increasingly liberal CDU. Most recently, Spahn caused controversy with a statement that there are parts of Berlin where the waiters only speak English. This is in addition to his frequent criticism of Merkel's refugee and integration policies. The 37-year old Spahn is currently deputy finance minister, having been passed over for cabinet-rank positions by Merkel. He is one of the next generation of promising CDU politicians, next to Julia Klockner and David McAllister. As FAZ notes in a well researched article on Spahn's political rise, Spahn appeals to conservative CDU supporters who are not quite ready to abandon their party for the more extreme AfD. The article also noted that Spahn has a habit of tripping up over commercial involvements, a no-go zone in Germany. Most recently, it came out that he was a co-owner of a start-up company that produced tax declaration software. When confronted on this point by the SPD, he agreed to sell his stake. The article makes the point that this is not the kind of debate you want to have one month before an election campaign. It also recalled a promise Spahn had made when he started his political career in his early twenties, that he would leave politics before turning 40.

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August 30, 2017

What a transition is, and what it is not

There is a lot of confusion about the nature of the transitional Brexit agreement. It would serve fundamentally three purposes. The first, from the perspective of the Brexiteers, is that it gets the UK beyond the point of no return: the ability to undo Brexit. After March 2019, a return to the EU would require an Art 49 accession procedure. Second, it hides the Brexit costs. If the transition goes at least to the end of 2020, which seems the pragmatic choice, the UK would simply continue to pay the equivalent of its annual EU net contribution until the end of the EU budget period. Third, the period gives extra time to negotiate a post-Brexit trade and association agreement, and reach provisional implementation of it.

Peter Foster of the Daily Telegraph raises an important issue that is often overlooked: the legal status of the transition. It is not a trade agreement. It is part of an Article 50 deal, which requires no procedure of parliamentary ratification other than qualified majority voting in the European Council, and a simple majority in the European Parliament. If it were dragged out, it would be open to a legal challenge because the case could then be made that it constitutes a de facto trade agreement. Article 50.2 has language that alludes to a transitional deal as negotiable:

"...the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union."

But "the arrangements for its withdrawal" can clearly not be stretched so far as to subsume a fully-fledged trade agreement. It is for that reason that the transitional deal has to be strictly time-limited and non-renewable. This is also the legal opinion of both the Commission and the Council.

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