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September 05, 2017

On the Turkish question

One notable sequence of the Merkel-Schulz duel was Schulz' categorial statement that the SPD no longer supports Turkish EU membership, and Merkel's tacit agreement with that remark. The question is now whether the Merkel administration will go beyond the decision to suspend talks on the extension of the customs union, to advocating a formal end to Turkey's EU accession talks. We noted a good analysis on this issue in Macropolis, which looks at the implications for Greece. The country has based its foreign policy on the assumption that Turkey would eventually become an EU member. 

"Should Turkey’s accession process be frozen, the biggest concern for Athens would be the uncertainty that this would cause, as such a development would take relations between the two countries into uncharted territory. If democratic concerns continue across the Aegean and Erdogan continues to implement a more hardline agenda, the EU’s relationship with Turkey could turn into an ideological clash."

We also noted a comment by Kemal Kirisci and Onur Bülbül at Brookings, who argue that the customs union had a positive impact on Turkey, and therefore it would be mistake to freeze talks on its development. The authors argue that the customs union helped Turkey to modernise its economy, and also to become more democratic.

The authors argue against the increasing tendency in Germany and elsewhere to freeze relations with Turkey, while supporting Jean-Claude Juncker's more constructive approach. Breaking off relations with Turkey now would strengthen Recep Tayyip Erdogan. The authors call on the US to put pressure on the EU to shift its stance.

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September 05, 2017

Macron's unemployment insurance reform, next?

Emmanuel Macron might have trade unions on board for the labour law reform, but don’t expect this backing to continue. The next challenge will be the unemployment insurance reform, but there is unified opposition to it among employers and trade unions.

Macron wants the state to have a say in the management of the unemployment insurer Unedic, managed by trade unions and employers since 1958. He wants the self-employed to be included, and to replace the current Unedic contribution on the wage bill with an increased social contributions. But trade unions are dead-set against a universal unemployment insurance. Macron may have lightened the tone a bit, as he no longer talks about nationalisation, but there is no doubt he wants a stake for the state.

In a rare event, the three employers' organisation and the five trade unions published in July a common statement defending their position. They argue that they know the labour market well, and know how to take difficult decisions. And the deficit in the unemployment insurance would not have been so large without the financial crisis and the government’s expenditure commitments. There is no fundamental problem with including the self-employed into the scheme, they say, but the question is how to finance it.

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September 05, 2017

Labour to vote against the Repeal Bill

There are more signs that the Labour Party is finally putting together a coherent policy on Brexit - not to stop it but to change it. The Guardian has the story this morning that the party's leadership is considering imposing a three-line whip on its MPs to vote against the repeal bill, once known as the Great Repeal Bill, which aims to translate existing EU rules into domestic legislation largely by government decree.

The Guardian writes that the bill would most likely still pass, because a handful of Labour rebels are expected to vote with the government while there is no rebellion on the Tory side. Parliamentary proceedings will start this Thursday with the main votes scheduled for next Monday.

The political issue at stake are the so-called Henry VIII powers, which allow the government to amend primary legislation using secondary legislation without additional parliamentary scrutiny. A further issue for Labour is the government's refusal to bring the EU's charter of fundamental rights into domestic legislation.

Among Brexit-related commentary we noted Charles Grant in the New Statesman arguing that the EU is likely to change in a direction that may make it easier for the UK to associate with the EU in the future. He rules out an Article 49 re-entry procedure, but notes that the election of Emmanuel Macron foreshadows a dual-speed Europe with the eurozone becoming more distinct from the EU. Two other factors are supporting this trend towards change. EU enlargement has stopped, and the EU's neighbourhood policies have failed. The only way forward for the EU is through new forms of partnership - like the privileged partnership once offered by Angela Merkel to Turkey. Grant's main point is that Britain, but also Norway and Switzerland, may find it attractive to join such an outer tier of the EU.

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