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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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