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October 22, 2018

A week of intense political tension in the UK

In the last few days, the chances of a no-deal Brexit have risen significantly for two interlocking reasons. The Tories seem to be hell-bent to destroy Theresa May while refusing to back a withdrawal agreement. The FT reports this morning that there is heightened speculation that a leadership challenge could be triggered very soon, with Sir Graham Brady, chairman of the backbench 1922 committee, receiving the 48 required letters from MPs as early as this week. The next meeting of his committee is Wednesday. What is breathtaking is the brutality of the language eurosceptic MPs are using in off-the-record briefings to journalists - conjuring up images of lethal violence against the prime minister. While a leadership challenge is definitely on the cards as a possibility, we cannot as yet see a challenger getting the required majority votes among MPs. But the situation is extremely fluid. 

The second reason why we think a no-deal Brexit is becoming more likely is that Remainers are increasingly betting the house on a second referendum. We note with surprise that a great number of UK commentators take it for granted that the EU would give its unanimous approval to what would effectively amount to a one-year extension of the Art. 50 process. We saw for instance Philip Stephens in the Financial Times on Friday dismissing the obstacles with the remark that it is difficult to see how the EU could withhold consent.

We do not share such a view of the problem. As we see it, the EU will consider a prolongation as a matter of course only until the European elections or, to be precise, until the dissolution of the European Parliament in April next year. Beyond this, the EU might prolong but only if it received clear evidence that the UK was indeed about to change its position. We see no realistic prospect that the UK parliament would have even legislated a referendum before the European Council would take a vote.

In our view, UK would have to revoke Brexit first, and then hold a second referendum at leisure. In any case, re-entry is possible under Article 49.

We agree with Francois Heisbourg highlighting that the EU holds elections in May and has to negotiate a budget. Life goes on, he says. This view was also echoed with Jean-Claude Piris, who noted that the maximum possible time of an extension was only a few weeks.

We think it is a huge miscalculation among Remainers to set themselves up for a situation in which the EU will end up having to reject their request for a second referendum. If this goes on, this will turn into another back-stabbing myth. The political damage could be huge and lasting.

The reality continues to be that if the Remainers vote down Theresa May’s Brexit deal, say in January of February, the most likely outcome would then be a no-deal Brexit. May could trigger elections - the Labour Party would support it. But she would only do so if she had a chance to win them, which must be highly doubtful under such a scenario. Rather, she might calculate that by 2022, the economy will almost certainly have recovered from a one-off Brexit shock in 2019. 

Nor is it likely that May will shift gear. Kevin O'Rourke is right to dismiss the hope among hard Brexiteers that May can be pivoted towards a Canada-style deal. A Canada-deal is simply not available. 

Yesterday, May held a long telephone conference with her ministers, some of whom expressed concern about the idea of a prolonged transitional period or an open-ended backstop period. May, meanwhile, defended her position in the Sun, where she wrote that she would press ahead with her policies irrespective of the consequences to herself.

Would Labour really support a people’s vote after voting down a deal? Patrick Wintour (@patrickwintour) informs us that while well over half a million people demonstrated for a second referendum in London, Jeremy Corbyn flew to Geneva to discuss Chile, and various other Labour politicians were preparing for a march against fascism.  

All this means that it is not really hard to see how an accident can happen. If you really think that it is unlikely that the UK parliament will accept May’s withdrawal agreement, then what you are saying is that you are expecting a no-deal Brexit. The second is a logical consequence of the former - once you take into account the EU’s legal and political position, and the majorities in the UK. 

The only reason we are not betting on a no-deal outcome just yet is that the above-mentioned logic will in all likelihood become much clearer at the time of the vote. And the EU will make it clear that this will be a take-it-or-leave-it offer, just as Article 50 said it should be.

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October 22, 2018

Poland's local elections reveal deeply-split country

All of us foreign onlookers fall prey to a distinctly lazy, virtually inescapable habit of equating a country and citizenry with its government. The trouble is that this tends to make the domestic opposition recede from our consciousness. It matters particularly when a country is culturally and politically divided into two almost equal camps. The other side is all too often forgotten when a country is considered to be one of the global breeding grounds for illiberal nationalistic democracy.

Poland is such a country as yesterday’s local elections have proved once again. According to exit polls, neither the nationalistic Law and Justice party (PiS), nor the centre-right Civic Platform, the main alliance of opposition parties, can plausibly claim a clear victory. The final tally is expected tomorrow or the day after. The Civic Platform did well in the big cities and, importantly, triumphed in Warsaw's high-profile contest. But it failed in its bid to expand its share beyond the quarter of the votes it received last time. The PiS scored around 32%, more than the 27% it received last time, but less than the share of almost 38% at the last national elections. The agrarian party came third with roughly 16%.

Unusually for local elections in a mid-sized country, the vote attracted substantial media coverage not just in Europe, but around the world. No less than the Atlantic Journal proclaimed the electoral face-off between the main candidates for the mayoralty in Warsaw to be a test case for global populism. Overall, yesterday’s outcome seems mixed enough to make it difficult to predict how Poles will vote in their upcoming electoral marathon: the European Parliament in May, the Polish parliament in the autumn, and the presidency in the summer of 2020.

It is of course always tricky in local elections to distinguish between the local and personal and the national factor; but the EU, in the guise of the European Court of Justice, certainly did everything it could to boost to the wider political significance of the poll. On Friday the ECJ issued an emergency injunction ordering the Polish government to suspend immediately and retroactively the law forcing judges - and notably those on the supreme court - into earlier retirement. The move is unprecedented, and we believe will be a watershed in the EU’s constitutional history. It is the first time that the ECJ has intervened in this urgent manner in a case of such constitutional relevance. We have already noted how the comparison with the constitutional history of the USA is always helpful when looking at the evolution of the EU. Any student of US history will understand that a federal supreme court interfering in the constitutional affairs of a constituent member of a union of states is a classic move on the road to a stronger federal power. The ECJ has issued famous landmark rulings shaping the evolution of the EU as an economic entity. The final ruling about the legality of Poland's judicial reform, and Poland's response to it, will be a decisive moment in the evolution of the EU as a political union governed by shared, and directly applicable, supranational norms.  

The government in Warsaw continued as in the past to respond with mixed signals, saying on the one hand that it would respect EU law – and therefore the ECJ’s injunction - while trying to get Poland’s supreme court to invalidate the ECJ's ruling. Its argument is that the Polish constitution supersedes the ECJ's treaty-based powers in this case. We note that this dispute is not specific to Poland: the conflict about the primacy - or not - of the national constitution over EU treaties has for instance been brought repeatedly before Germany’s supreme court. The judges in Karlsruhe judges have until now responded with deliberately ambiguous judgments, maintaining a prudent judicial truce, and evading a clear decision about its own possible subjection to the ECJ. Will the Polish judges risk a fundamental conflict their German peers have until now done everything to avoid? And, if yes, how will the EU respond? What is at stake here goes way beyond the preservation of fundamental norms in Poland.

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