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November 01, 2017

Brussels receives Catalan president as a circus

Carles Puigdemont gave his press conference in Brussels yesterday, where he essentially announced that he will fight his extradition from Brussels. He did not say it in so many words, but when you say Spain doesn't guarantee your freedom or safety, and deny that there is effective separation of powers in Spain or that you can get a fair trial there, this has to be the conclusion. Puigdemont did say that he would return to Spain only when "guarantees" exist. He also said he was not in Brussels to seek asylum or to evade justice. But, of course, appearing before a Belgian extradition judge is not evading justice. The noted Belgian human-rights lawyer Paul Bekaert, who had previously confirmed being retained by Puigdemont, told Flemish TV station VRT that they will fight any Spanish request for extradition. We therefore expect Puigdemont to miss his court appointment at Madrid's Audiencia Nacional on Thursday and Friday. If he does, there would be prima-facie evidence of "risk of flight" and so the procedural situation of his fellow indictees - the members of his cabinet - may worsen. 

Puigdemont's appearance was otherwise rather contradictory. While calling himself the legitimate president of the Catalan government, he explained he and his government didn't resist their dismissal or call public servants to resistance because they wanted to spare the Catalan public a violent crackdown by Spain. On the other hand, he called on the public to resist the application of the Article 155 measures allowing the Spanish government to control the Catalan government. And, by framing the December 21 regional election as a plebiscite on the Art 155 measures, he accepted the elections called by Mariano Rajoy.

While seen from outside Catalonia it may seem that the game is over, and the general tone was to treat Puigdemont's press conference as a circus, there are two million separatist voters who have been mobilised for five years and are now under strong cognitive dissonance. Cognitive dissonance is not necessarily resolved by accepting reality. More often than not, a narrative is found that allows people to go on with beliefs and behaviours that are contradicted by the facts. Such as attempting to organise a cross-party list for the elections headed by Puigdemont, his deputy Oriol Junqueras, and the two grassroots leaders currently in jail.

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November 01, 2017

Canada Dry

Ambrose Evans-Pritchard has a good analysis in the Daily Telegraph, focusing on the second stage of the Brexit talks. As readers know, we have been more optimistic than others about the likelihood of an Article 50 agreement. The reason is that the deal is not particularly controversial, so long as the UK accepts to pay its share of the EU's obligations during the period of extended EU membership, and as long as the EU does not impose punitive exit terms. There now seems to be a realisation on both sides that failure to reach an agreement would be a mutual disaster.

But the Art 50 deal is not the end of the story. Far more important is the trade deal, and Evans-Pritchard is right to warn about misplaced expectations. We, too, keep on hearing notions of a Canada-Plus-Plus agreement, even some form a single passport for the financial sector. We see absolutely zero probability (meaning 0.0%) of this. The EU's view is that Brexit implies third-country status. There is no such thing as partial membership of the single market. It is possible to agree on a customs union association agreement, but that would undermine the UK's ability to strike third-country trade deals. What is left is not Canada-Plus but what Sir Ivan Rogers, the former UK ambassador to the EU, calls Canada-Dry. He is absolutely right.

The trade deal the EU will offer to the UK will encompass a zero tariff agreement on manufactured goods, plus specific chapters in areas where a disruption in trade would be devastating for both sides. The EU could, for example, offer a temporary regime for airlines and nuclear materials. But trade deals are, by definition, not about services. 

We have noted time and again British delusions (including, and perhaps especially among pro-Europeans) about the EU's position. The biggest danger we see is the sudden onset of disappointment, which may trigger a renewed debate about whether it would be in the UK's interest to crash out of the EU without any deal. That would be a serious mistake. Canada-Dry is still a good deal because it minimises disruption, except for financial services.

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November 01, 2017

Me too

While the events in Catalonia are still developing, they are already whetting the appetite for independence in other European regions. One of them is Corsica. The island is known for its fraught relationship with the French ever since it was taken over in 1769. Yesterday, one of its MPs raised the question in the French assembly of whether the PM would be willing to open a dialogue about the island's independence, according to LeLab. Interior minister Gérard Collomb responded to this request saying that there can be dialogue about further autonomy, but only inside the French Republic. 

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  • March 26, 2018
  • On the run no more
  • Terrorist attack will challenge Macron
  • A double-whammy of geopolitical and financial uncertainty
  • March 08, 2018
  • EU will not offer UK a financial services deal
  • What if the DUP implodes?
  • Has Mario Draghi expropriated German savers?
  • February 21, 2018
  • Whom do Wauquiez' indiscretions serve?
  • Latvian claims and counterclaims
  • Some observations about euro-ins and euro-outs
  • February 08, 2018
  • Could the Irish question still trigger a hard Brexit?
  • January 26, 2018
  • Will the prison strike turn the fate for Macron?
  • Destroying the constitution in order to save it
  • Will populism wane with the global recovery?
  • Issing on the coalition agreement
  • January 15, 2018
  • Is the section on Europe for real?
  • Can Drahos upset Zeman?
  • January 05, 2018
  • Catalonia's government by Skype
  • The case for EEA membership
  • December 21, 2017
  • Catalonia votes
  • A deputy prime minister resigns
  • Will Gibraltar result in another Irish fudge?
  • Blood, sweat and tears
  • December 12, 2017
  • Unconventional ideas as a metric of the SPD's despair
  • Rodrik on why a fiscal union is necessary
  • December 04, 2017
  • Can Brexit still be stopped?
  • Could Poland open up the Posted Workers Directive again?
  • Has the Bank of England solved the productivity puzzle?
  • November 27, 2017
  • Will Northern Ireland scupper a Brexit deal?
  • Last-ditch effort to prevent Irish elections
  • Pressure on Wauquiez
  • November 20, 2017
  • Showdown over Northern Ireland
  • Castaner and his list confirmed
  • Gennimata to lead the new left alliance
  • Brexit‘s ultimate irony
  • 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 09, 2017
  • From street protests to road closures
  • What Russia wants
  • November 06, 2017
  • Pressures on EU rise over Catalonia
  • German pre-coalition talks hit glitch
  • If you thought UK politics couldn‘t get worse...
  • November 02, 2017
  • The Impact of Brexit
  • German court of auditors questions diesel tax break
  • On trade and violence
  • November 01, 2017
  • Brussels receives Catalan president as a circus
  • Canada Dry
  • Me too