We use cookies to help improve and maintain our site. More information.

January 24, 2018

AfD europhobe to chair of Bundestag's budget committee

Germany doesn't have a grand coalition yet, and may never have one, but the Bundestags acts as though it is a forgone conclusion. According to its internal rules, the main opposition party gets the chairmanship of the budget committee, which is the single most influential committee because any ESM programme would have to go through this committee first. 

The designated AfD politician is Peter Boehringer, who is the party's spokesman on the euro and monetary policies. As FAZ reports, he is an advocate of immediate German withdrawal from the eurozone, which he calls an illegal transfer union. FAZ notes that the importance of the appointment should not be overestimated. The chairman watches over the rules of proceedure, but has little influence on the votes themselves as the majority in the committee reflects the number of seats in the Bundestag. We are not quite so optimistic. Wolfgang Schäuble managed to co-opt the Bundestag during the days of ESM programmes, and this is largely a procedural matter. The constitutional court has given the budget committee in particular the power to vet programmes, and a hostile committee chairman could impose procedural blocks. The Bundestag has been operating a gentlemen's agreement whereby all parties obtain the chairmanship of some committees. There has been a debate to exclude the AfD, but the decision was taken not to treat the AfD differently from other parties. 

With a grand coalition, the AfD would become the main opposition party. The decision to press ahead with the appointment of Boehringer is logical in one respect: if the grand coalition doesn't happen, there would be new elections anyway. So, there is no risk of appointing the wrong opposition politician. 

Show Comments Write a Comment

January 24, 2018

Watch out for the Labour Party debate on the single market

We have repeatedly dismissed suggestions of a revocation of Brexit. But we think there is a slightly greater chance of a revocation of parts of Theresa May's Brexit mandate. It is possible - though not very likely - that a majority in the UK parliament could be organised for the UK to become a formal member of the EEA.

We know from our own conversations that there is currently a debate going on inside the Labour Party. If Jeremy Corbyn were to change of his mind on this issue, it could unleash a new dynamic. We don't think he is going to change his mind, though, for the simple reason that he benefits more from attention focusing on divisions inside the Tory party rather than opening up divisions within Labour. 

But this debate is not over yet. We noted a comment in the New Statesman by the Labour MP Wes Streeting, who argued that there was still time for Labour to make the case for staying in the single market. He points to a poll of MPs finding that 56% believe that single market membership is compatible with the Brexit vote. This includes 90% of Labour MPs. 

The argument he brings forward is a bit simplistic, and factually not correct. Leaving the EU does not require leaving the single market, he writes. This is not true. Norway, Iceland, and Liechtenstein, have not left the EU. EEA membership was constructed as a step towards potential membership in the future. What is true, however, is that EEA membership is something the UK could in theory seek to negotiate. It cannot claim it unilaterally as some UK lawyers and politicians believe to be the case. 

Where we agree with Streeting is on the internal political dynamics that would set in if the Labour Party leadership endorsed a change in the Brexit mandate.

We feel that it is already too late for a change in the mandate. We are now half-way through the Article 50 process and, while the UK and the EU have not yet debated the nature of the future relationship, there seems to be a convergence of views on the broad outline of that relationship. This is true at least for the formal framework:; the trade part would be an ordinary third-country trade deal like the one with Canada and South Korea, but there would be additional elements for broader co-operation. An aviation agreement is possible, as is some limited access for services industries, but we don't think that it will resemble anything close to what the UK enjoys today.

Show Comments Write a Comment

January 24, 2018

On the productivity puzzle

The book by Jonathan Haskel and Stian Westlake on the productivity puzzle is one of the more important contributions in economics literature in recent years. For those who don't have time to read it, there is an article in Vox in which the authors summarise the core of their argument, which is focused on the rise in the intangible economy. Measured productivity growth will remain low until governments design the physical and legal institutions this new economy requires.

The authors start with the observation that the ratio of tangible to intangible investment, still strong positive in 2000, inverted around the time of the financial crisis and is now strongly negative. Intangible investments include data, R&D, and developing of business processes. National accounts measure some of it, like software, but not all of it.

The argument is essentially a variant of the mis-measurement theory. If you underestimate the degree of tangible investment, then you underestimate GDP growth. But there is a lot more to it. The authors go into some detailed explanation of other channels through which shifts in intangible investments affect productivity. This is still a new area of research, and it is clear that we are still in the stage of hypothesis formulation. This is clearly not the final word on issue, but probably the most promising avenue on which to proceed.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.


Recent News

  • July 05, 2017
  • Europe’s next migration crisis
  • Philippe: French need to kick spending addiction
  • November 28, 2016
  • And now what Monsieur Fillion?
  • The inescapable logic of an interim agreement
  • On Germany's foreign policy post-Trump
  • How to lose against the populists
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 09, 2018
  • Orbán gets his supermajority
  • Riding the wave of resistance
  • The EU’s self-defeating strategy
  • October 09, 2017
  • UK is starting to prepare for a no-deal Brexit
  • Why Germany will resist meaningful eurozone reform
  • April 13, 2017
  • Did Russia influence the Brexit vote?
  • All good between Germany and the US now?
  • October 18, 2016
  • The self-destruction of Francois Hollande
  • Brexit psychotherapy
  • At least three candidates for the PvdA leadership
  • The unbelievable hypocrisy of Mario Monti
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 25, 2018
  • Rejected by US, Germany is turning towards China...
  • ...and France is turning to Russia
  • UK ties Galileo to security partnership
  • Germans are discovering miniBoTs
  • January 17, 2018
  • Labour smashes No Brexit dreams
  • A new political bargain in Portugal?
  • September 13, 2017
  • Why the Turkey negotiations will continue
  • May 10, 2017
  • PSOE primary campaign in full swing
  • Czech government crisis escalates
  • Backroom dealing on electoral reform in Italy
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 25, 2016
  • The costs of Brexit
  • Redefining corruption
  • Greek government shocked, shocked...
  • The costs of Brexit
  • Redefining corruption
  • Greek government shocked, shocked...
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 10, 2018
  • Steadfast Juppé stays true to embattled Macron
  • Sweden’s Democrats and Germany’s AfD: they don’t win elections, but they set the political agenda
  • Is Boris going to challenge Theresa May?
  • 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
  • July 02, 2018
  • Is Trump out to destroy both Nato and the EU?
  • Salvini’s empire
  • Remembrance as a way forward?
  • June 13, 2018
  • Macedonia - a deal hailed internationally and challenged at home
  • Macron - elusive to the left
  • What did Theresa May concede?
  • May 28, 2018
  • A no-confidence motion that could backfire
  • The political repercussions of a historic referendum in Ireland
  • Why the lack of an international role for the euro matters
  • May 14, 2018
  • Catalonia: plus ça change...
  • Conveney says no to Brexit with border infrastructure
  • Why the noble Lords don't really matter
  • April 30, 2018
  • Looming May protests against Macron
  • France has discovered the Laffer curve
  • An important resignation in the UK
  • April 16, 2018
  • Italy's and Germany's pained response to the Syria attacks
  • On the end of the eurozone's economic honeymoon
  • Why Bulgaria should stay out of the euro
  • Where shall we meet after Brexit?
  • April 03, 2018
  • Is the time for Brexit revocation running out?
  • March 23, 2018
  • European Council supports UK more strongly than expected on Russia
  • Eurozone policy renationalisation is not the solution
  • The state of macro is not good
  • March 14, 2018
  • The geopolitics of trade war
  • A European labour authority
  • On Novichok
  • March 06, 2018
  • Will Italy exit the eurozone? Of course not. But it's the wrong question.
  • Slovakia's political crisis
  • Are we heading for a trade war?
  • February 26, 2018
  • Angela Merkel's cabinet
  • February 19, 2018
  • SPD divided over grand coalition
  • Wauquiez - the French Trump?
  • Why Brexit will be extremely hard to reverse
  • February 12, 2018
  • What the euro debate is really about
  • How Brexit can still falter
  • February 05, 2018
  • How big is Germany's external surplus, really?
  • Macron's first election test
  • Coeure's endorsement of a fiscal union
  • February 01, 2018
  • How Brexit can still go badly wrong
  • Two presidents - one elected, another challenged in first round
  • January 29, 2018
  • Where is the opposition in France?
  • Scenarios and risks for Syriza over Macedonia
  • January 25, 2018
  • About political leadership in the 20th century
  • Progress in name dispute talks and new opposition at home
  • About 40% probabilities