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June 13, 2018

Macedonia - a deal hailed internationally and challenged at home

The diplomatic world hailed the agreement between Skopje and Athens as a historic breakthrough. The new name for both domestic and international purposes would be Republic of Northern Macedonia. It ends a bitter 27-year name dispute that kept Macedonia out of international institutions such as Nato and prevented an EU membership application. The details of the agreement have yet to emerge, though.

At home this deal remains controversial in both countries. It is threatening to split the Greek government coalition and cause a rift between the Macedonian prime minister and president. In both countries the main opposition parties have rejected the deal. Kyriakos Mitsotakis from New Democracy went so far as to question Alexis Tsipras' legitimacy to sign a treaty that does not have the support of his own government, according to To Vima. Organisers of past rallies against a deal accuse Alexis Tsipras of high treason. Opponents in both countries perceive that their own side capitulated and gave in to the demands of the other.

The plan is that the two foreign ministers will sign the deal first, then it is to be ratified in the Macedonian parliament. Tsipras said Greece will back Macedonia's application to join Nato, contingent on constitutional changes including the name written in the constitution, to which the Macedonian president is opposed. Without those changes, neither can they join Nato nor can EU accession talks start, Tsipras warned. The changes will have to be confirmed in a referendum, which the Macedonian government plans to hold in the autumn, and subsequently approved by the parliament. 

On the Greek side, the position of Panos Kammenos is a political problem for Tsipras, according to Macropolis. Without the support of his junior coalition partner Anel, Tsipras will have to fish for support among other parties. To Potami's leader Stavros Theodorakis indicated they back a deal. This will come to a head once Macedonia does its part. In the meantime, the rift in the coalition raises the question whether the Greek government retains the necessary credibility to govern. Mitsotakis' hardline  stance in opposing the deal and questioning its legitimacy also keeps the government on its toes, and the right wing of his party engaged. He called the recognition of the Macedonian language and nationality as unacceptable concessions. Mitsotakis can be expected to ride on any public reaction against the agreement. 

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June 13, 2018

Macron - elusive to the left

Emmanuel Macron does not easily yield to pressure. His party was expecting a reorientation towards the left after the avalanche of reform measures that were perceived as leaning to the right. The discourse even changed, with a more careful wording when talking about social services by barring any reference to budget cuts. But what does Macron do instead? Within 24 hours, he frustrated those who hoped he would now move to the left with three seemingly unrelated moves: instead of an emotional reaction over the fate of the migrants on the Aquarius, Macron stayed cool. He denounced Italy's cynicism and referred to international law and a Franco-German initiative in late June. At least 30 of his MPs had called for a faster, stronger and more emotive response, according to the Journal du Dimanche. Macron also gave the green light to privatisations of Paris' airports, France's national lottery game operator and the energy company Engie. And Macron will meet once again Philippe de Villiers, an entrepreneur and politician who campaigned against Islam and European integration. Freedom of choice or provocation? Cécile Cornudet finds that his counter-reaction to pressure shows a pattern that has been seen already in the past: when Macron was framed as the president of the rich, he went on to announce the end of the exit tax system for the super rich.

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June 13, 2018

What did Theresa May concede?

There were several interpretations of what happened yesterday in the House of Commons. We side with the take by the BBC and the FT, who see the compromise offered by Theresa May as a significant climb-down and a potential victory for the rebels. The mechanics of the various amendments is technically complicated, and not really necessary to understand the politics of this. Essentially what happened is that the government has accepted to take into consideration a compromise amendment tabled by Dominic Grieve, a former attorney general. His amendment would give the House of Commons the ability to take matters into their own hands if there is no deal by February 2019. With the promise of this new amendment, MPs agreed to vote down a more extreme version proposed by the House of Lords. 

We are still wondering whether the rebels have considered the EU's position in all of this. The EU deals with governments, not with parliaments. And Article 50 gives a clear guideline on what happens if the exit agreement is not ratified. So, what could happen if there is still no deal by February?

One possibility is for the House of Commons to instruct the government to ask for a short extension of the Article 50 negotiating period, and to seek a customs union agreement with the EU with full compliance of single-market rules for goods subject to the customs union agreement. We can see a majority of MPs in the House of Commons being in favour of such a policy.

A more likely possibility is a snap general election. A failure to ratify a withdrawal agreement could be interpreted as a relevant trigger for an election. That would happen well before the February deadline. If the Tories win and are in a position to form a majority government, May's version's of the Brexit deal, or lack of it, would prevail. If Labour wins, the UK would seek membership of the enhanced customs union. 

The February deadline would matter, however, if the government refused to agree a deal - one that would be acceptable to the Commons. In that case, the Commons would prevail over the government. 

What we don't see is a meaningful second referendum. If parliament ratifies, there is no need to ask a question. If not, there will probably be elections. If there is no deal, there is no question to ask either. And there will probably be elections as well. 

But the amendment has the capacity to weaken May's negotiating position. We see no chances of the EU agreeing to Theresa May's muddled version of Brexit, unless the EU believe the UK is ready to crash out. But since the amendment makes the cliff-edge Brexit less likely, the EU will have no incentives to compromise. 

Number 10 and backbench MPs had different interpretations of what was agreed yesterday. The government clearly wanted to avoid the appearance of a concession, pointing out that it offered only talks on the Grieve amendment. But the ball is in the MPs' court. The process will go back to the House of Lords, which will table a new amendment incorporating Grieve's ideas, and this will again go back to the Commons. This could happen as early as next week.

The government managed to defeat all the other amendments, including the one on the EEA. We see no majority in UK politics in favour of full EEA-membership, given the impact on immigration rules. But we see a majority for an extended customs union and association-agreement deal. What is not quite understood in the British debate is the conditions the EU would impose. We don't think the EU would, or should, accept the freedom of movement for goods but not for people. There is simply no way around the ever-recurring dilemmas in the Brexit debate. If you want your immigration policy and trade deals with third countries, the only deal the EU will offer is a Canada-style deal with full single market integration of Northern Ireland. If that is not acceptable, as it is not, the only remaining alternative is no deal. That reality has still not sunk in fully on either side of the debate. 

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