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April 26, 2018

Philippe and the protest movements

In France the stand-off with the trade unions over the reform of the rail company SNCF continues. Neither government nor unionists signalled that they would move their positions, but there are signs that things are moving nevertheless. Édouard Philippe invited the trade unions to talks in early May. Unionists were particularly angered about the government's latest plans to spin off freight transport into a separate company, and that the government is making the end of the workers' privileged status by 2020 a condition for the state to take over the SNCF debt, so Mediapart.

Participation in the rolling strikes, two days per week, has fallen too as only 20% of the unionists participated this week compared to 34% on the first day of the strike. But the number of striking conductors has not fallen, which means transport is still affected. When it comes to the details of the negotiations, trade unions are also apart from each other, be it about the end of workers' privileges or the preparation towards a more competitive rail market. The game is not over yet, but at least for now the pressure seems to ease off.

What happened to the student protests? In about five universities police forces cleared the spaces, according to Le Monde. Édouard Philippe, after meeting with the university presidents, warned that the government will do whatever it can to assure that exams can proceed. About ten universities are still occupied by students, most of them only partially but some totally. The students are protesting against the new student orientation law (ORE), which allows universities to pick their own students if oversubscribed. They argue that this is against the idea of a non-discriminatory university open to all. 

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April 26, 2018

Scorched earth on Galileo

The outlines of what a no-deal Brexit might look like may be visible in the dispute over the UK's participation in the Galilieo satellite navigation system, and it is not a pretty sight. The FT is reporting that the UK is prepared to adopt scorched-earth tactics to force the hand of the EU on this issue. The FT's headline that the UK is exploring the possibility to launch its own independent satellite navigation system seems to us less important than the confrontational quality of the whole discussion.

The European Space Agency already had to postpone a vote to approve procurement for the next batch or Galileo satellites in March, as the UK threatened to veto over the EU's stance. Now the FT writes that British ministers are considering whether the UK can refuse Galileo the use of to its ground stations in the Falkland islands and Ascension island in the south Atlantic, and also whether the UK can claw back €1.4bn worth of funds contributed to Galileo since 2003.

The UK objects to the EU 's decision that Galileo cannot rely on a non-EU member for sensitive parts of the project. The EU is also not guaranteeing the UK future access to the encrypted layer of Galileo intended for the government and military. In addition, Airbus has committed to run its ground control services, currently in Portsmouth, from EU territory after Brexit.

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April 26, 2018

A customs union option

The debate about a customs union in the UK has reached fever pitch. The DUP is now threatening to pull out its support for the government, and otherwise level-headed commentators are losing their cool. We spare you of the details of a debate that consists mostly of noise. 

What we should be looking at instead are the possible compromises. The issue of the future relationship will not be part of the withdrawal agreement itself, only of the accompanying political declaration. While this will be legally binding on all parties, it will not constitute a trade agreement. Hence there is room for compromise on both substance and wording. You could have a customs union without the name. There is less room for a fudge on the substance of customs union than with other agreements but, as George Parker and James Blitz note, one of the options under discussion would be a time-limited customs union. The UK would stay in a customs union until the technology for frictionless trade across the Irish border is developed. That may take ten years or so - in our view - but it might just be sufficient for Theresa May to ward off the Brexit-in-name-only criticism. 

This would also constitute our own favourite solution: a customs union as the interim trade agreement. This could be followed by a more comprehensive trade agreement, or a second referendum on re-entry - not to frustrate Brexit but to undo it.

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April 26, 2018

And finally, the emission-less diesel car

This story reminds us of the German company that developed the last generation of analogue telephone exchanges in the 1990s, hoping to fight off the relentless advance of the digital technology. It was mature and stable. And probably with some technical advantages over the then still-not-fully-developed digital technologies. But it came too late.

FAZ reports this morning that Bosch has a produce a new generation diesel engine with almost no emissions. Problem solved. We are not in a position to test the claims themselves. We have no reason to disbelieve them either. But will this be enough to regain the trust of customers who have literally been cheated by software developed by the same company? We find it hard to believe that this technology can be introduced early enough and in sufficient quantities to prevent diesel bans in German and other European cities. And the latter is the reason for the acute sales crisis of diesel cars, which has turned into a self-fulfilling prophecy. At a time when the US and China are developing electrical smart cars, the fate of the ultimate diesel engine looks to be the same as that of the world’s best analogue telephone exchange.

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