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August 31, 2017

Where are the Républicains?

Another important development in France is happening among the Republicans. After the presidential elections they have nearly lost their status as main opposition group, partly because they were internally divided but also because Macron stole their favourite subjects and young talents. They lost Éduard Philippe, Bruno Le Maire, and the 'constructives’ who split to support the government.  Now, there comes a new hope. Laurent Wauquiez has his eye on the presidency of the Republican party, which has a leadership election coming up in December. The post is vacant at trhe moment. He still has not declared his candidacy, but acts as if he is already the frontrunner. Wauquiez is young and talented, and defines himself as the opposite of Macron: he believes in the party system and the left-right cleavage, and accuses Macron of lacking values. Still, he has some way to go until December to get enough support inside the party. But he is definitely someone to watch out for. If he were to become the new leader of the Republicans, expect it to be a game changer for Macron.

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August 31, 2017

Poland unmoved by EU rule-of-law sanctions

A month ago the Polish government led by the Law and Justice party PiS appeared to suffer two setbacks in its attempt to reform the judiciary. The first was president Andrzej Duda vetoing two of the laws reforming the supreme court and the national council of the judiciary - the top governing body of Polish judges. The second was the EU opening an infringement procedure against Poland on the argument that a third law reforming the lower courts fell afoul of the EU treaties. The Polish government appears to have gathered its strength during the summer recess and shows no signs of backing down.

This week its foreign ministry said in a statement that it had responded to the European Commission's separate request for clarification under the toothless "rule of law framework". According to Politico's summary, Poland told the Commission that its concerns over the judicial reforms were unfounded, as the reform was in line with European standards and responded to widespread popular demand in Poland. The response turns Duda's vetoes against the Commission by pointing out that some of the EU's concerns refer to laws that will not be coming into force in the form criticised by the EU. 

In an entry published on his Polish politics blog during our summer break, Aleks Szczerbiak looks at the broader significance of Duda's veto. This was shocking because Duda, despite giving up his membership of PiS to give his presidency a semblance of nonpartisanship, had so far sided with the PiS government in all its controversies, including its ongoing confrontation with the constitutional court which started soon after the government took office in late 2015. Szczerbiak writes that Duda may have been motivated by a desire to widen his appeal beyond the PiS base, with a view to re-election in 2020. Also, despite public assurances to the contrary, Duda may have been influenced by the massive street demonstrations against the judiciary reforms. The blog cites polls showing that a majority of Poles support Duda's veto, despite the fact that the Polish public is dissatisfied with the workings of the judiciary as the PiS claims. Duda also supports the broader goal of reforming the Polish judiciary, and with his vetos appears to be setting up an alternative power centre to the party strongman Jaroslaw Kaczynski. But his actions could backfire as he now owns the judicial reform, having promised to produce his own proposal to resolve the issues raised by his veto.

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August 31, 2017

May will stay through Brexit, and then fight the 2022 elections

This has been a terrible year for political pundits in the UK, who after the serious misjudgement about Jeremy Corbyn went on to predict that Theresa May would be gone within weeks or months after the snap election. And, while the prime minister's position has clearly weakened, she shows no sign of quitting. Yesterday she reaffirmed that she wants to stay on to fight the 2020 elections. Boris Johnson, meanwhile, is no longer seen as a potential leader, and is now being widely ridiculed as the buffoon he always has been - most recently in a vicious hit piece by Rachel Sylvester in the Times. The political reality of 2017 is that May will stay and so will Corbyn, Brexit will happen in 2019, and there will be a transition.

The negotiations in Brussels, however, have hit a predictable gridlock over finances. The UK will not make an offer of what it is prepared to pay unless it has assurances over future trading relationship. And the EU will not offer trade talks unless a financial settlement is reached first. As we have pointed out, the gridlock can be undone through a transitional arrangement, but this would also require some sense of the kind of FTA/Association Agreement the EU has in mind. It is clear that the UK does not accept the EU's demand on an upfront settlement deal. This issue will ultimately have to go to the European Council, or it will remain unresolved because we do not see the UK giving in on this issue.

We noted Theresa May yesterday effectively confirming her no-deal-is-better-than-a-bad-deal stance, albeit in different terms. The rhetoric has changed, but not the substance.

Peter Foster reports in the Daily Telegraph that EU negotiators were flabbergasted when a young Whitehall negotiator on the UK side challenged the legal basis of the Commission's position on the Brexit bill. This is because an exit by a large country has not been foreseen. We, too, find it hard to see the legal basis for a settlement claim because this should clearly have been mentioned in the treaty. The issue about the Brexit bill is political. And for that reason it is understandable that the UK wants to know details of the future relationship, because this will determine the price it is willing to pay.

Our expectation is that the talks will remain gridlocked, but that this thorny budget issue will not be decided until a final negotiating marathon at the end - we presume towards the end of 2018. While it is our expectation that there will be a deal, followed by a transitional period on the lines now supported by the Labour Party, we do see the risk of a breakdown of negotiations as the UK is likely to prove a much more difficult negotiating partner than what the EU is normally used to.

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