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October 05, 2017

May clings on

The Daily Telegraph and some of its ultra right-wing commentators were quick to declare the end of Theresa May's premiership. There was nothing wrong with the content of her speech at the Tory party conference. May suffered a coughing attack, a prankster walked up the stage and handed her a fake P45 end-of-employment notice and, to cap it all, the stage set behind her collapsed. If you are into symbolism, you need no more information.

But when you wake up the next morning, you ask yourself: what has changed? The maths of replacing her is still the same. The Tories still failed to make the transition from focusing on what they hate - Europe, essentially - to what they want. 

The best comment this morning, in our view, was from Simon Jenkins in the Guardian. Like us he, too, mocked all the political commentators who predicted May's downfall by the autumn, and notes that she is still there and shows no signs of leaving. 

"May has a remarkable capacity to bring out the worst in those round her. It is a skill not to be underrated."

Jenkins make two substantive points. The first is that May may well emerge from yesterday's debacle curiously strengthened. Her greatest lack so far has been humanity. During her speech, she was compelled to convey humour, vulnerability, and emotion. She will continue to be unpopular, but the Tories elected her, and are now stuck with her.

But Jenkins also noted that May failed to address Brexit. This is where she truly faltered. She dodged the confrontation between the hard and the soft Brexiteers within her party, a confrontation that needs to be resolved soon. Eventually she will have to do this, as both John Major and David Cameron did during their period in office.

Peter Foster observed that Brussels will dismiss May's soft threat to walk out of the talks if there is no agreement, which she no longer phrases in terms of "no deal is better than a bad deal". In Manchester, she said: 

"It is our responsibility as a government to prepare for every eventuality. And let me reassure everyone in this hall – that is exactly what we are doing."

Foster makes the point that the EU largely discounts that threat because they see that the UK is clearly not preparing for this eventuality, while they did see May's overtures in Florence. The trouble is that she may not carry the Tories with her. Michel Barnier and the EU27 may then end up driving the Brexit process over a cliff.

The Spectator makes another important point in an editorial about the Tories' lack of a firm agenda. The Tories are good at diagnosing problems, but not able to come up with solutions. The biggest policy pledge from the conference is to build more social housing, which the Spectators says is wrong. The problem with the UK housing market is an artificial depression of supply because of land laws, and the refusal by local councils to make land available for development. Instead of state-subsidised mortgages, a much better way to fight the housing crisis is to allow more housing to be built. The Tories' approach will end up doing the opposite: by increasing demand for existing houses, they will drive up the housing market even further.

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October 05, 2017

On German ECB conspiracies

Germany's Die Welt is not a paper we monitor regularly because it uses the techniques of tabloid journalism when addressing serious subjects. We find it often unreliable. The paper is also part of the broader gang of German media deeply opposed to the ECB in general, and Mario Draghi in particular.

It makes a big spiel of the fact that the ECB last month bought €11.1bn worth of French government bonds, which is €1.6bn more than the ECB's capital key would have suggested. And this happens at the expense of what Die Welt calls "more solid states", like Germany, the Netherlands, or Finland, where the purchase volume undershot the average monthly target.

The paper at least quotes Mario Draghi's comments at the last press conference, when he said that the deviations were connected to technical factors, such as maturities. In any case, the capital key does not apply to the volume of monthly purchases but to the total stock, and the rules give the ECB a lot of flexibility on fine tuning the programme. 

The article notes that the portion of French assets in the programme is 22%, while France's share in the capital key is only 20%. The article notes that the ECB increased the French purchases ahead of the presidential elections. The volume then fall back a little, but was increased after Emmanuel Macron announced his reform plans. The article ends on the conspiracy theory that the ECB wants to strengthen Macron in his attempt to push through his ideas for eurozone reform against Germany.

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October 05, 2017

Mélenchon's crusade against the EU flag

Jean-Luc Mélenchon and his LRI deputies are crusading against the European flag’s presence in the French National Assembly. They tabled an amendment to change the rules of the lower house, so that only the French and UN flag are allowed to fly there. The initiative is backed by the Front Nationale, as Louis Aliot confirmed yesterday. Later that day the proposal was rejected in the law committee of the Assembly. The crusade is likely to continue, though. 

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