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April 09, 2018

Orbán gets his supermajority

As we wrote on Friday the only question about the Hungarian general election held yesterday was not whether Victor Orbán's party Fidesz would win the election, but whether it would get a supermajority of two thirds needed to change the constitution. According to preliminary official results Fidesz won 133 of 199 seats, which is the bare minimum above two thirds. It did so on a high turnout, too. The government is celebrating the highest turnout since the fall of Communism. The result is a validation of Orbán's anti-immigrant, anti-EU, anti-liberal campaign, with antisemitic conspiracy theory overtones personified in attacks on George Soros' funded organisations. 

Fidesz has now won three consecutive elections with a supermajority of over two thirds. The reason Orbán had no longer a supermajority in the outgoing parliament despite winning it in 2014 is that it had lost two MPs in the interim, who had become independents. Orbán will continue to be able to amend the constitution at will, and to shape Hungary into effectively a single-party political system. The far-right party Jobbik came second with 26 seats, gaining 3 seats from the previous election and switching places with the social democratic party MSZP, which won 20 seats losing 9. Despite improving their seats and ranking the leader of Jobbik, Gábor Vona, resigned last night on what he considered a poor result.

The slide of the social democratic party from its peak of power in 2006 is both a long-term trend in Hungary and a broader trend in the EU as a whole. Hungary is now one of a long list of countries where the two main parties are both on the right, because the collapsing social democrats have not been replaced by a party on the left but one on the right. Poland and the Netherlands are firmly in that list. Whether to include France and Italy depends on where one puts Macron's En Marche and the Five Star Movement, but asked about the right-wing economic policies of his government Édouard Philippe quipped "what did you expect?" Spain and Austria - and even Germany - seem to be moving in the same direction. In many of these cases - Germany, Italy, the Netherlands, Hungary, Austria - the party replacing the social democrats could be classed as far-right. This doesn't look like a Europe where Orbán should feel particularly uncomfortable.

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April 09, 2018

Riding the wave of resistance

France has a proud history of resistance, looking back on Jeanne d'Arc, the French revolution, and the resistance against Hitler. The unions have their history of resistance too, a history of confrontation with the political class over its reform plans. A 22-day strike against Jacques Chirac's bold welfare reform in 1995 forced him and Alain Juppé to withdraw their plans. 

Today the new SNCF reform plans are another high-profile battle in the spirit of resistance. There is now a 50/50 opinion split for and against the unionists' strike actions. The ideological substrate for resistance is still there, which means public opinion could fall behind the unionists any time, writes Eric Le Boucher. The rail workers style themselves the defenders of public service: have the last decades not shown that introducing competition only leads to excess capitalism with more inequality with more low paid jobs and a disappearance of the middle class? What are the €3000 they earn compared to the millions a CEO gets? This taps into voters' fears and misgivings.  

Can the government's reform survive this resistance? Édouard Philipe just affirmed that the French government will see the reform through to the end. The trade unions, both the moderate and the confrontational ones, came out of the two meetings with the transport minister even more annoyed than before the rolling strikes started, according to Journal du Dimanche. Today, the second week of strike actions starts. These rolling strikes with two days per week of strike actions are scheduled to last until June. The question is not whether to keep the status quo or modernise. And whether or not the public service can be guaranteed depends on reforms. After all the SNCF monopoly on passenger rail expires soon, as competitive tendering starts EU-wide in 2019.   

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April 09, 2018

The EU’s self-defeating strategy

Wolfgang Munchau notes that the EU suffers from a triple over-dependence: on the US for defence, on Russia for energy, and on the rest of the world as an absorber of a structural current-account surplus. If you are so dependent on others, you are by definition geopolitically weak. The US owes its geopolitical strength not only to its defence spending, but also to the role of the dollar as the global reserve currency - the main reason for the US’ exorbitant privilege. Moreover, EU over-dependence is not accidental, but the outcome of concrete policy choices, such as a eurozone crisis resolution strategy based on the elimination on current account deficits in every crisis country without offsetting falls in surpluses elsewhere. The collateral damage from this policy is becoming evident in a world where Russia plays a geostrategically more important role than the EU despite the relatively smaller size of its economy. Russia is far less dependent on the rest of the world than the EU.

In this broader context we noted a comment by Hans Kundnani who argues that the next phase of European integration will be qualitatively different from the previous ones. The EU moves away from the idea of ever-closer union towards a community where help is based on conditionality. His conclusion is that European integration is not inherently a good thing.

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