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September 08, 2017

SPD keeps sliding

The TV debate has been a disaster for Martin Schulz because he missed an opportunity to put some clear distance between himself and Angela Merkel. The latest polls, which were sampled after the debate, tell us that support for the SPD is dropping further. 

Here are the numbers:

In % GMSInfratest/Dimap
CDU/CSU3837
SPD2221
Greens98
FDP1010
Left Party910
AfD811

A 21% result would be a disaster for the SPD. The three parties of the left would be at under 40%. In the first poll, a coalition of CDU/CSU and FDP would have 48%, while the other four opposition parties would have exactly the same. In the Infratest/Dimap poll, CDU/CSU and FDP would not have a majority, so the SPD might creep back into the grand coalition. This prospect is one of the reasons why so many SPD voters are disillusioned. The polls also confirm strengthening support for the AfD. The party may not reach the high levels of support it enjoyed at the height of the refugee crisis, but it seems to have survived the recent internal disputes, all the while shifting further to the right.

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September 08, 2017

Macron in Athens: symbolism over substance

The most memorable thing about Emmanuel Macron's visit to Athens may end up being the image of him speaking at night in front of a lit Acropolis. When summaries of his speech emphasise that he spoke on Pnyx hill where the Greek assembly met since the 5th Century BC, one suspects the speech was more about symbolism than content. Macron said he would propose a six-month period of public debate on the future of Europe in the first half of 2018. According to Greek Reporter

"... His attack on the existing institutions was the furthest any pro-European politician has ever traveled on the road of criticism. But there was no tangible plan presented for his so-called “road map” to a deeper and more democratic (European) union in his speech. ..."

Earlier in the day, Macron had held a joint press conference with Alexis Tsipras, where he praised the Greek government's efforts to reform and get out of the crisis. Both leaders agreed on the need to carry out democratising reforms of the EU structures. Macron also said that France is ready to invest in Greece, and he underscored that by travelling with an entourage of 40 French business leaders, writes Macropolis

The only bit of additional substance reported by Associated Press from the 50-minute speech at Phyx was Macron's criticism of IMF participation in the Greek programmes, and Germany's insistence in involving it to enforce austerity measures. He said the ESM should take the lead role in eurozone financial rescues instead, as if a German-led ESM would be any less brutal an enforcer of austerity without what has in fact been a moderating influence by the IMF, all things considered. At the joint press conference, he also blamed the IMF for lack of progress in the Greek program review

“The IMF’s role in the end of these talks must be in good faith and without adding further conditionality ... We should not exhaust our ministers and officials with nights and weeks of talks about the (Greek) growth rate over the next 20-25 years down to the decimal point”

Greek president Prokopis Pavlopoulos also expressed his preference for replacing the IMF with an institution with a European mentality and an understanding of the euro's special features. Presumably he meant the ESM by that.

The reason IMF involvement in the Greek programme was wrong is not that it substituted for a European expertise in dealing with such a crisis - which the EU did not have in 2010. The reason is that the function of the IMF is to lend hard currency to countries that cannot access it, and in the case of Greece it was lending its own currency to it. Or else its financial involvement was an implicit admission that - without the ECB standing unconditionally behind the European governments like the central banks of England, the US, or Japan, do - the euro really is a hard foreign currency for eurozone member states. A German-style ESM will not change that.

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September 08, 2017

The main Brexit battle lines run through the Tory party

The British Conservatives are now, once again, in open internal warfare over Europe - this time about the precise relationship of the country to the EU in a transitional period. As we have said before, much of the UK media reporting on Brexit is based on someone's ignorance - either on part of the writer or the subject of the report. If one discusses the transitional period, one has to understand that the EU is unlikely to offer a range of choices, and certainly no bespoke relationship. We can see a continuation of the status quo, with continued payments into the EU budget, but it is quite hard to envisage any transition in which the ECJ's role is diminished, or in which citizens rights are not guaranteed. 

This is why the letter leaked by a group of several dozen Conservative MPs to the BBC is essentially saying that the UK wants a clean break. Specifically the MPs reject single market access during the transition, because this would require continued payments into the EU budget. We doubt that they will get their way but, if they did, this would be tantamount to a no-deal scenario because the UK would hardly pay £50-60bn to the EU to cover existing commitments if the UK were to exit cold-turkey out of the single market in March 2019.

The signatories of the letter, however, offer a compromise. The Article 50 deal must include a timetable for withdrawal from the single market, and the UK must be able to legislate an earlier withdrawal if it wants to.

The first of these suggestions is also in line with the EU's legal interpretation. The transitional agreement has to be strictly time-limited and non-renewable, for it would otherwise risk classification as a full-fledged trade agreement as opposed to an arrangement that can be folded in Article 50. We think, however, that it is unlikely that the EU will sign an Article 50 agreement whose content could be revoked unilaterally by the UK.

The Guardian, meanwhile, reports that the UK government is preparing for a technical retreat over the omnibus bill that turns all existing EU laws and regulations into UK law. The bill, also known as the Repeal Bill, gives the government the right to implement the transfer without any further referral to the parliament. People on both sides of the Commons have criticised the bill. Dominic Grieve, a former Tory attorney general, called it an "astonishing monstrosity". There is a face-saving attempt under way to modify the bill, especially to reduce the so-called Henry VIII powers, which essentially allow the government to legislate by decree, in order to gain sufficient support in the parliament. The current consensus is that the Tory rebels in particular are not planning to vote against the bill in the final reading, but are merely seeking concessions.

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  • Referendum numbers are edging up - slowly
  • Goulard's foreboding rejection
  • Turkey advances in Syria and threatens Europe
  • September 04, 2019
  • Alternatives to the backstop - what are the chances?
  • How to unlock European investment beyond monetary easing
  • July 29, 2019
  • No-deal Brexit is no longer just a scenario
  • No German warships to the Strait of Hormuz
  • June 24, 2019
  • Economic reform has torn up the SPD - climate policy does the same for the CDU/CSU
  • Not intruding, not really
  • May 20, 2019
  • Far right on the march
  • A plot against the EU - a new weapon to stop Le Pen?
  • April 15, 2019
  • Finland's far right changes the game
  • Brexit party drawing almost even with the Tories
  • March 11, 2019
  • Ask what Europe can do for Germany - AKK's EU manifesto
  • February 07, 2019
  • Forget Tusk - the real action is elsewhere
  • On David Malpass and the Trump legacy
  • January 07, 2019
  • What to look out for in the Brexit debates
  • Macron's last-resort tool for the gilets jaunes
  • December 06, 2018
  • There can be no deal as long as delusions of easy alternatives persist
  • What do the gilets jaunes mean for green fiscal policy?
  • November 08, 2018
  • Macron under heavy fire
  • Don’t underestimate AKK
  • October 11, 2018
  • How to shrink the Irish border
  • The people versus the motor car
  • Timmermans volunteers as social democratic spitzenkandidat
  • Golden visa report hits hard at member states
  • September 14, 2018
  • Carney warns about dramatic hard Brexit impact on housing market
  • Can Africa thrive on free trade with Europe?
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • July 20, 2018
  • Why preparations for no-deal Brexit are a positive development
  • On confirmation bias in the Brexit commentary
  • June 26, 2018
  • Could the Irish border issue trigger a no-deal Brexit?
  • Is Harley-Davidson's decision really a victory for the EU?
  • June 04, 2018
  • German discourse out of control
  • Wait for European disunity on US tariffs
  • May 14, 2018
  • Catalonia: plus ça change...
  • Conveney says no to Brexit with border infrastructure
  • Why the noble Lords don't really matter
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • April 03, 2018
  • Is the time for Brexit revocation running out?
  • March 12, 2018
  • German industry is starting to panic about Brexit
  • February 21, 2018
  • Whom do Wauquiez' indiscretions serve?
  • Latvian claims and counterclaims
  • Some observations about euro-ins and euro-outs
  • February 05, 2018
  • How big is Germany's external surplus, really?
  • Macron's first election test
  • Coeure's endorsement of a fiscal union
  • January 19, 2018
  • On the futility of discussing the German current account surplus
  • The Brexit revocation madness
  • Varadkar, the enfant terrible in the Brexit negotiations
  • 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 13, 2017
  • A pro-European list: Wauquiez' nightmare
  • Catalan separatism isn't going away
  • Why oh why does Germany behave the way it does?
  • Why the four freedoms matter
  • November 03, 2017
  • Catalan separatism is energised again
  • A prime minister without a party
  • Northern Ireland - handle with care
  • The death of liberalism
  • October 25, 2017
  • How to think about a Brexit baseline scenario
  • Like the right, the left, too, is divided over Europe
  • October 16, 2017
  • What‘s the deep meaning of the elections in Lower Saxony?
  • Can Brexit be revoked?
  • Macron's grand narrative
  • October 09, 2017
  • UK is starting to prepare for a no-deal Brexit
  • Why Germany will resist meaningful eurozone reform
  • 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 19, 2017
  • German populist vote - as seen from the outside
  • May's total Brexit power grab
  • September 15, 2017
  • Juncker dragged into the Catalan fray
  • What to say in Florence
  • How to fill the gap left by the British MEPs
  • September 13, 2017
  • Why the Turkey negotiations will continue
  • September 11, 2017
  • Turkey issues travel warning for visitors to Germany
  • How nasty is the AfD?