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October 13, 2017

Why Austria’s vote matters

Austria goes to the polls on Sunday. There is a widespread expectation that the ruling grand coalition is likely to end, and replaced with a coalition of the centre-right ÖVP and the far-right FPÖ, but there are many uncertainties, including the rather large number of people who have not yet made up their mind. The inclusion of the FPÖ in the next government would complete the shift to the right not just in Austria itself, but in the entire region. Poland and Hungary both have governments of the right, and it looks that both Austria and the Czech Republic - which goes to the polls next Thursday - are moving in the same direction. We are looking at an insurrection by the Habsburg Empire against the EU.

There is a generalised rule in European politics - the smaller the country, the harder to understand its politics from the outside. Belgium is a famous example, but Austrian politics is also right up there. The best analysis we have seen so far is from Stephan Löwenstein, who wrote in FAZ that the decline in the SPÖ's popularity is of a different kind than the decline in the SPD in Germany. Chancellor Christian Kern is quite popular, but the Austrians are fed with the permanent grand coalition, which has been running the country for most of the last four decades.

We are noting similar voter reactions against centrist coalitions in other countries. Löwenstein notes that both parties are now actively wooing the FPÖ as a potential coalition partner, and it is this that makes the end of the grand coalition credible in the eyes of the voters. This is also why the FPÖ has lost support over the Summer. Many people are switching to the ÖVP in the certain knowledge that its leading candidate, foreign minister Sebastian Kurz would not re-enter a grand coalition. Depending on the outcome of the elections, an SPÖ/FPÖ coalition is also possible. One reason is that the FPÖ might find the SPÖ an easier coalition partner to deal with. There are still memories of a previous coalition with the centre-right under Wolfgang Schüssel, which ended disastrously for the FPÖ. But FPÖ and ÖVP have a lot more in common, including on refugee policy, and they both share a broadly eurosceptic outlook. While an ÖVP/FPÖ coalition is seen as the more likely outcome, the Austrian elections are not nearly as slam-dunk as the Germans elections were, in the sense that Angela Merkel was widely and correct predicted to remaining in office. The results were still a surprise, but the ultimate expectations about Merkel held up.

If the consensus view on Austria prevails, central and eastern Europe will tilt further away from the Brussels consensus. The Habsburg Empire has long disappeared of course, but Austria is still a small regional power.

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October 13, 2017

What a Paris diesel ban would mean for Europe's car industry

We picked up the story from Spiegel that Paris is planning a diesel ban as early as 2024, after the summer Olympics, and a ban of all fuel-fired engines from 2030 in order to meet its emission targets, at least according to the deputy mayor Christophe Najdovski. We have no idea whether Paris will ultimately pull through with this but, if so, this could have an impact on the car industry fairly soon, and not only in France. If you buy a new diesel car in France or elsewhere on the continent, you are a little over six years away from the ban. The ban thus falls into the expected life-span of the diesel vehicles, and can be expected to depress prices as demand for diesel cars falls. The car industry wants a gradual change with no diesel bans and no targets, simply because it is not ready to change as it overinvested in the diesel technology. If the example of Paris is emulated elsewhere, which we think it will, we could see a massive switch away from fossil-fuel cars to alternative modes of transport, including but not limited to electric cars.

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October 13, 2017

A Dutch referendum on the Dutch referendum?

Sometimes one cannot help but think Dutch politics is an anthology of first-world problems. This week: organising a consultative referendum on repealing the consultative referendum law.

Since 2015 the Netherlands has a consultative referendum law, considered one of the crown jewels of the left-liberal party D66, now the third of the large parties in the four-party Rutte III coalition. But the short Dutch experience with the consultative referendum law has been traumatic. As soon as the law was passed eurosceptics managed to gather enough signatures to trigger a referendum on the ratification of the EU-Ukraine association agreement, not out of any real animosity towards Ukraine but to give the EU a black eye. And a black eye they gave to the Rutte II cabinet, which campaigned halfheartedly for the agreement and ended up having to negotiate a face-saving interpretative declaration by the European Council in order to be able to ratify the agreement. Now, the Rutte III coalition agreement includes the intent to repeal the consultative referendum law, with the agreement of D66. 

But getting rid of referendums won't be easy. Therry Baudet, who helped instigate the Ukraine referendum and is now one of two MPs for his own right-wing populist party Forum for Democracy, has vowed to fight to preserve the referendum law. The first skirmish in this battle was a motion in the parliament yesterday, introduced by Baudet, against the anti-referendum provision in the Rutte III government agreement. Baudet's motion was defeated narrowly, with the small Calvinist party SGP voting with the governing majority. A spokesman for the Dutch advisory Council of State has stated that a repeal of the referendum law is potentially subject to a consultative referendum as well. There is already a petition afoot, initiated by labour party Niesco Dubbelboer who was a co-sponsor of the original consultative referendum law, to appeal to MPs to keep it.

The Dutch government has a trick up its sleeve, though. When the time comes to repeal the referendum law, a provision can be included that the repeal law is urgent and must come into force immediately without recourse to a referendum.

Mewnwhile, there is an initiative to organise a referendum against a wiretapping law passed earlier this year, which is already in the signature-gathering stage. It is unlikely that the referendum law will be repealed in time to prevent a vote on the wiretapping law.

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