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March 15, 2018

Miro Cerar resigns over railway

Some people have a tendency to confuse Slovakia and Slovenia, and today events conspired to produce nearly identical headlines about both countries. Slovenia's PM resigned yesterday, on the same day as Slovakia's PM. Just don't get their names and reasons for resignation mixed up. 

Slovenia's PM is Miro Cerar, of the left-liberal Modern Centre Party (SMC - originally "Party of Miro Cerar"). He's near the end of his term as elections are scheduled no later than July this year. Cerar's resignation is likely to lead to earlier elections, in May, but there are no indications of this yet. The government will stay as caretaker until a new government is appointed. The reason for Cerar's resignation is that the Slovenian supreme court just voided the result of a referendum held last September on the law governing the construction of second railway track of 27km between the country's only seaport at Koper, and the city of Divaca. Depending on who you ask, the second railway track is necessary for the economic development of Slovenia, or a pet project of Cerar and his cronies.

Given the timing, whether Cerar had stayed in office or not it's quite likely that the Koper railway would have been an election issue. Cerar's position is weak. According to election polls support for the SMC has gradually dropped from over 34% at the last election in 2014 to under 6% recently. Leading parties are the right-liberal SDS and recently the List Marjan Sarec, built around the second-round challenger to president Borut Pahor at the last presidential election. The Social Democrats are also part of what looks like a three-way race. Cerar had just come out of a party congress this past week-end which re-elected him as leader unanimously. He boasts with an economic recovery during his three-and-a-half-year mandate. 

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March 15, 2018

Taking on trade unions over the rail reform

Emmanuel Macron does not shy away from difficulties, on the contrary he seems to thrive on them, as is clearly the case with the holy grail of reforms, that of the rail operator SNCF. Macron wants to prove that he can do what his predecessors failed to deliver. His government has better cards than the Chirac administration in 1995, when Alain Juppe as prime minister was forced to take back his SNCF reform after several weeks of transport strikes, writes Les Échos

The economy is picking up and is providing a positive economic climate; the public is all in favour of a reform as it was in 1995 before the strikes, only this time services have visibly deteriorated over the last decades; the trade unions are divided over the course of action; and Nicolas Sarkozy's 2007 reform made it harder to mobilise workers for strikes (the will have to opt in two days before and have to take the hit in salary).

But nothing is played yet. One incident is sometimes enough to change the course of this reform trajectory. The only certainty is that the ability to reform France will be tested in the coming weeks.

Yesterday the government presented its draft law for its SNCF reform, to be fast-tracked by decree. The law ends guaranteed employment and early retirement pensions for new employees. It aims to transform the SNCF into a publicly listed company, a first step that trade unions fear would lead to privatisation. 

Mediapart writes that the proposal is short on details and does not answer any of the fundamental questions about the SNCF, its services, its organisation, or what to do with its debt. None of the proposals of the trade unions made it into the four-page document. But the government promised more deliberations with the trade unions in the coming weeks. And the government did not kill the privilege of free transport tickets for family members of employees, and refrained from promising to close down not-so-profitable lines as suggested by the Spinetta report. But, taken together, it looks like they are preparing for a stand-off. 

Trade unions will decide this week about the strike actions, joining protest marches on March 22, or even rolling strikes. The change of the legal status and the fact that the government wants to force the law through by decree incensed the trade unions in particular. The government justifies its haste to get the reform through by decree as a way to strengthen SNCF before passenger rail traffic across Europe is opened to competition next year. Transport minister Elisabeth Borne told Les Échos that rival operators could start running on France's high-speed TGV lines under an open access system starting in December 2020. 

For the CGT, the most-represented union in the SNCF, it is also a question of its own future. Its leader Philippe Martinez has been challenged internally over his strong ideological stance, according to l'Opinion. They lost influence due to their refusal to cooperate in earlier reform proposals. The question for them is not only how important the strikes will be, but also where to go after March 22.

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March 15, 2018

How strong is the EU's solidarity with the UK really?

The lead story in the Times this morning caught our eye, as it quoted a spokesman for President Emmanuel Macron denouncing the rather modest sanctions against Russie announced by Theresa May yesterday. The prime minister decided to expel 23 Russian diplomats but stopped short of any further sanctions, including financial action, which had been widely expected. The Times quoted Benjamin Griveaux, Macron's spokesman, denouncing the expulsion as fantasy politics and insisting that the UK should not take action until there is proof of Russian involvement. That's a very strong reaction in our view, especially considering Macron's own statement of solidarity with the UK previously.

The Skripal affair has the potential to bring the UK and the EU closer together - not to reverse Brexit itself but to provide an incentive for closer co-operation on foreign and security policy, as well as on trade. But if the UK feels it is left on its own, the affair might have the opposite effect.  

The bilateral stand-off between the UK and Russia is indeed very serious. The UK regards itself as the subject of a chemical attack, the first ever in post-war Europe. We also noted a statement by Sergei Primakov, a former Russian prime minister who is very close to Vladimar Putin, as warning that the Skripal affair is worse than anything that happened during the Cold War. He said that Russians believe that the attempted murder of Skripal was the work of western intelligence agencies with the intent to interfere in the Russian elections. 

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