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January 31, 2018

A compromise of words

One of the reasons why Martin Schulz' popularity in Germany is hitting new lows is his tendency to oversell. Yesterday he made a claim that the SPD has prevailed with its position on refugees, when in reality the opposite is the case. The two parties have now agreed that the families of refugees with subsidiary status - those from war zones, for example, who are not individually persecuted - will not be able to join their relatives in Germany until the summer. From then onwards, there shall be a contingent of a maximum of 1000 per month, but only on humanitarian grounds. The SPD wanted a new hardship clause that would allow the numbers to go higher, while the CDU/CSU interpret the hardship clause as applying to the monthly contingent of 1000. 

The issue of families of asylum seekers with subsidiary status is important, because the Bundestag has to legislate right away as existing legislation expires this month. Even before the grand coalition is formally agreed, CDU/CSU and SPD will tomorrow support a vote in the Bundestag to extend the existing ban on family reunification for asylum seekers with subsidiary status, after which the new quota rule will take over.

But the coalition agreement foresees that there is no legal claim for the 1000 monthly family members. It is considered a humanitarian gesture only. The head of the CDU/CSU Bundestag group, Volker Kauder, said that this compromise fully reflected the CDU/CSU position on this issue. As FAZ reports, on this point the SPD has only achieved some face-saving language, but nothing of substance. At the last party congress Schulz said the SPD would renegotiate this part of the preliminary coalition agreement to introduce a hardship rule. He said yesterday that this goal had been achieved. The government parties, however, said that the agreement would still provide for a hard limit of 1000 family members per month.

We are only too well aware that politics is full of hype, but Schulz has a tendency to underestimate the intelligence of his audience, and of his party members in particular. What happened yesterday was not a victory for the SPD. Germany is tightening its immigration policies.

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January 31, 2018

The Maybot will go on and on and on

Ever since the last election there have been periodic outbursts of rumours that Theresa May would either resign voluntarily or be toppled in a Conservative leadership contest. Early this morning, UK newspaper websites thought it was newsworthy to report May saying, on a plane to China, that she has no intention to go. We are wondering: why should she? Nor do we see a change in the intricate balance of eurosceptics and europhiles within the Tory Party that keeps her in power. There is currently nobody in the parliamentary party who could assemble more votes than her get in a leadership contest, especially not at this stage in the Brexit negotiations. Boris Johnson, who was considering a plot after the Tory party conference last autumn, pulled back because he knew that a challenge would be too risky. While the political hacks at Westminster are full of excitement about secret plots and backstabbing, the reality is that it will be hard to get rid of May - at least before Brexit takes formal effect.

As the Times reports, May still has more public support than any of her potential rivals, despite losing the support of three-in-ten among the voters who supported her at the last general election. According to a YouGov poll, 69% of those who voted for the Tories last year believe she should stay prime minister, while only 18% think she should stand down. Across all voters, 41% are in favour of her staying, and 34% are opposed. The poll also shows that, among voters, 11% would be more likely to vote Tory if Boris Johnson were leader, while 20% would be less likely. A leadership contest would therefore be extremely risky for the Tories. We cannot exclude that it will happen, but we can exclude that it will succeed electorally.

One interesting development is the evolving shift in the position of the Labour Party on Brexit in favour of a customs union agreement. We noted that both Jeremy Corbyn and Sir Keir Starmer, Labour's Brexit spokesman, have ruled out a second referendum. Starmer yesterday reiterated his support for a customs union, at least as a negotiating option, while reiterating his rejection of a second referendum in an article in the Belfast Telegraph. 

Daniel Finkelstein, a Times journalist who is also a Conservative member of the House of Lords, wrote that the debate about a hypothetical second referendum is nonsensical - because leave would win by a large margin. He gives the following reasons: the referendum would be on an agreed withdrawal deal - it's not the leap into the unknown which Brexit was in the first referendum. The fear-based arguments of the Remain side have lost their potency, after the warnings of doom and gloom turned out to be exaggerated at best. And, this time, it is the government that will campaign in favour of leaving. Finkelstein also noted that there are many Remain supporters who would now vote Leave as a matter of principle - in protest at a repeat referendum. Finkelstein concluded that Leave could win a much-enhanced majority.

Our view is that a second referendum is very unlikely because May is most likely to stay PM, and even in the unlikely event of a leadership challenge we see little chance of another election in the next 12 months. And even if there were an election within the next twelve months, and if Labour were to win, we see no real chance of the Labour Party campaigning for a second referendum. Why should Jeremy Corbyn open up wounds in his own party when he can blame the Brexit mess on the Tories? A far more likely consequence of a Labour victory before March 2019 would be a request for a short delay in the Article 50 proceedings with a view to changing the future trading relationship into one encompassing a customs union agreement.

However, in the extremely unlikely event of a second referendum before March next year, we see the outcome as wide open. Finkelstein's argument are persuasive but the problem with referendums is that they are inherently unpredictable.

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  • On the future of the EU - the final part 12 of our series
  • October 07, 2019
  • What did Conte know?
  • April 08, 2019
  • Welcome to the new Brexit grand coalition
  • Waiting for Macron's next move
  • October 08, 2018
  • A renewed willingness on both sides to cut a Brexit deal
  • Latvian politics in turmoil after huge populist gains
  • 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
  • March 10, 2020
  • Virus math
  • October 29, 2019
  • People's Vote descends into Civil War
  • CDU at odds on dealing with extreme parties
  • June 19, 2019
  • What the US-Iran standoff tells us about the EU
  • Is Germany withholding information on right-wing extremism?
  • February 08, 2019
  • Macron turns stand-off with Italy into a game changer
  • Is there a strategic intent behind Macron's decision?
  • October 01, 2018
  • After the referendum, more turmoil in Macedonia
  • What will happen if the UK parliament votes No?
  • Barnier's no-thanks works much better than a yes-please
  • 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
  • May 14, 2020
  • Another migrant wave from Turkey?
  • Hyperventilating about the German court
  • April 03, 2020
  • After medical concerns, economic concerns take centre stage in Greece
  • New momentum to exclude Fidesz from the EPP
  • The Swedish experiment
  • February 24, 2020
  • Coronavirus comes to Europe
  • Municipal elections - a precursor for Le Pen?
  • Germany and France get involved over Idlib
  • January 15, 2020
  • Philippe's not-so-generous compromise offer
  • What is Erdogan up to in Libya?
  • When it is noise and not a signal
  • December 09, 2019
  • The next three days
  • November 04, 2019
  • Brexit tactical voting is happening - on both sides
  • Merkel promises 1m charging stations - but doesn't tell us how
  • September 30, 2019
  • A pyrrhic victory for Kurz
  • Will there really be UK elections?
  • August 27, 2019
  • Remain’s narrowing pathway
  • Macron's diplomatic masterstroke
  • July 26, 2019
  • Could Johnson succeed?
  • Turkey's retaliation
  • June 24, 2019
  • Economic reform has torn up the SPD - climate policy does the same for the CDU/CSU
  • Not intruding, not really
  • May 24, 2019
  • Rising campaign stakes are a double-edged sword for Macron
  • So May is going. And now what?
  • It's beginning to look a lot like Brexit in Switzerland
  • April 24, 2019
  • May's final and biggest gamble
  • Will the EP be Brexit's great parliamentary beneficiary?
  • Can Loiseau fight the far right given her past?
  • March 25, 2019
  • An object lesson in realpolitik
  • On the probability of a no-deal Brexit
  • February 25, 2019
  • Deal versus short delay
  • The astonishing weakness of Five Star
  • The real threat is from the left not the right
  • January 29, 2019
  • What comes after plan B fails? Plan C, of course. C for cliff-edge
  • Gilets jaunes, how to structure a movement in free flow?
  • European Court of Auditors criticises Juncker’s investment fund
  • January 04, 2019
  • Will the AfD become the Dexit party?
  • Romania's corruption problem in the spotlight of its EU presidency
  • December 10, 2018
  • ECJ says UK free to revoke Article 50, even inside extension period
  • A turning point in Macron's presidency
  • China has added Portugal to the list of its key EU partners
  • Belgium's coalition implodes over Marrakesh pact
  • November 15, 2018
  • Ratification is more probable than it appears
  • Romania's problematic presidency
  • October 23, 2018
  • May hardens position on Irish backstop under pressure from cabinet
  • Greek pension cuts - a classic European dilemma
  • October 01, 2018
  • After the referendum, more turmoil in Macedonia
  • What will happen if the UK parliament votes No?
  • Barnier's no-thanks works much better than a yes-please
  • 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 27, 2018
  • Be careful what you wish for - trade edition
  • A test of Pedro Sánchez' majority
  • July 09, 2018
  • German panic about Target2
  • AfD level with SPD
  • How the EU could fail
  • June 20, 2018
  • Does Macron support Merkel over refugees?
  • Arising doubts whether the meaningful vote rebellion will succeed
  • The message of two shocking polls
  • June 04, 2018
  • German discourse out of control
  • Wait for European disunity on US tariffs
  • May 21, 2018
  • Another snap election in the UK? Tories are preparing
  • Merkel and Putin - the beginning of a beautiful friendship?
  • May 08, 2018
  • Macron and the technocratic republic
  • Philippe's silent offer to the SNCF unions
  • On the ordoliberal utopia of a debt-free state
  • 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 09, 2018
  • Orbán gets his supermajority
  • Riding the wave of resistance
  • The EU’s self-defeating strategy
  • March 29, 2018
  • Macron's fight against the Islamic Hydra
  • A small-country mindset in a trade war
  • March 19, 2018
  • Waiting for Germany
  • Russia’s friends
  • Can the Commons force an extension of the Art 50 period?
  • March 08, 2018
  • EU will not offer UK a financial services deal
  • What if the DUP implodes?
  • Has Mario Draghi expropriated German savers?
  • February 28, 2018
  • Watch out, the Brexit debate could take a nasty turn
  • Welcome back to the European Council, Silvio!
  • February 21, 2018
  • Whom do Wauquiez' indiscretions serve?
  • Latvian claims and counterclaims
  • Some observations about euro-ins and euro-outs
  • February 16, 2018
  • How big will the euro budget be?
  • February 12, 2018
  • What the euro debate is really about
  • How Brexit can still falter
  • February 07, 2018
  • A short note on bitcoin
  • 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 31, 2018
  • A compromise of words
  • The Maybot will go on and on and on