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December 04, 2018

Brexit Revoked - the scenarios

We feel that we can provide a service to readers by not reporting the distracting noise in the final week of Theresa May's increasingly hopeless attempt to get the withdrawal treaty passed by parliament. Forget the British government's internal legal advice - it is irrelevant. The main legal issue to watch out for is today's opinion by the advocate general of the European Court of Justice on Brexit revocation. It could influence the debate if the results were surprising - i.e. to allow revocation to happen unilaterally or not at all. Otherwise, the drama that is now playing out in the UK is likely to take its full course. 

We thought it might be useful to lift some of the fog in the current Brexit debate by reversing the timeline - working backwards from a decision to revoke Brexit, assuming for now that this is legally possible. A prime minister would have to write to the European Council to request it. Domestically, that cannot legally be done with a change in the Brexit laws, like the repeal of the European Communities Act and the EU withdrawal act. We are informed that these legal requirements are not difficult, but crucially they require the government to initiate the process. 

That information alone tells us that the parliament cannot force the entire process of Brexit revocation on a reluctant government. Another reason why that process is unlikely to succeed is the requirement of unanimous approval in the European Council to extend the Brexit deadline. A Brexit revocation is politically unlikely to happen before March, simply because there is not enough time to hold a referendum. We believe that process would take a year from start to finish because it is going to be difficult even to agree a set of questions and procedures, and we are certain that whatever choice gains majority support in the Commons will ultimately be challenged in the courts. We think it would be very unlikely for the EU to agree unanimously to an extension of Art. 50 if the British government were not wholeheartedly behind Brexit revocation at that point. 

We conclude, therefore, that a successful Brexit revocation requires the active support of the British government. We see no chance that the present administration would want to do this - not just because of Theresa May's repeated assertions, but also because of the majority position in the cabinet. We see no other Conservative government taking that road, which would possibly end up destroying the Tory party. The most probable Brexit revocation scenario would thus be through new elections. 

The Fixed Term Parliaments Act gives only two choices. The opposition needs to win a motion of no-confidence. Labour says it will table a motion right after next week's vote, but it also does not expect to win it. Alternatively, May could initiate the process herself by seeking a two-thirds majority among all MPs, as she did last year. 

Furthermore, Labour would have to decide whether to campaign in favour of a second referendum. If it does, and goes on to win an election, a second referendum will happen. In any other constellation it won't - Labour victory without second referendum pledge, Tory victory, or hung parliament with a Tory prime minister.

Our conclusion from this backwards timeline is that the path towards Brexit revocation lies in new elections, a change in Labour's official position on the second referendum, and a Labour-led government - irrespective of whether it has an outright majority or not. 

Back in the real world, and going forward, we see two scenarios. The first is defeat of the withdrawal treaty; a failed confidence motion; a subsequent failed but time-consuming attempt by the parliament to assert itself as a backseat driver; a small renegotiation of the political declaration at the forthcoming EU summit; and a renewed vote in January when the choices will have narrowed down to deal-vs-no-deal.

The alternative scenario would be a defeat of the treaty, leading to new elections through one of the routes above.

Andrew Duff writes in his latest column - to be published by the ECP today - that there are no sensible ways to reverse Brexit. 

"It is highly improbable that the House of Commons left to its own devices can prevent Art. 50 from taking its course. Only the prime minister can ask the European Council to extend the Article 50 deadline beyond 29 March, and unless she is specifically mandated by parliament to promote an alternative plan, she will not do so. The EU heads of government are adamant that they will not agree to an extension merely to indulge party political chaos at Westminster."

He concludes May should target pro-European MPs to support her deal, rather than pursue a futile quest for the favour of a partisan majority. She could promise Remainers a much stronger parliamentary role in the future stages of the process, for example a say over the extension of the transition period.

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December 04, 2018

In search for a bold response to the gilets jaunes

Emmanuel Macron faces a conflict like none of his predecessors: the gilets jaunes protesters are not fringe utopians but normal people, furious about the political impasse, and backed by the public despite the violence at the demonstrations. How to stop the escalation of this pent-up rage? 

It is a race against time, and it requires some bold moves. In times when rage is so easily shared via social media, political tools seem quite outdated. Some proposals like the moratorium on diesel tax may have done the trick last week, but not any more. A starting point maybe, but there is hunger for more gestures. Any new tax cut or expenditure increase will need time to be prepared and presented to the public. Raising the minimum wage or the wealth tax would be moving backwards, significantly compromising Macron's credibility. All those new measures are unlikely to quell the rage. In any case, with an already-tight budget there remains not much space for an economic somersault. And there are those in commerce, including petrol station operators, who suffer from the current stand off. How much compensation can Bruno Le Maire promise them? They certainly add to the pressure for a quick response in order not to spoil the Christmas season. 

What about a political gesture? The gilets jaunes called for Macron to resign or the National Assembly to be dissolved. A referendum, a dose of proportionality in the elections or citizens' laws, have been proposed. None of this is realistic. What about a national-unity government? Only if the opposition parties were to agree to such a politically very dangerous move. We do not see this happening just yet. The smallest gesture would be to dismiss Christopher Castaner, interior minister and a loyal Macron supporter from the very first hour. But sacrificing a pawn may no longer be enough. Dismissing the prime minister is in another league. It would be painful enough for Macron but it may give him back some political space, writes Nicolas Beytout

Édouard Philippe is increasingly under fire from LREM MPs and Francois Bayrou. It was Philippe who refused moratorium last week and preferred to preserve the image of constancy and non-retreat over the diesel tax. Now he has to find a bigger rabbit in his magical hat, without compromising the rest of the presidency. An impossible task, maybe. He received thirty opposition leaders who lobbied for a moratorium on the diesel tax. He is expected to lay out the government's strategy in his speech to the Assembly on Wednesday. 

Macron chose to stay silent this week. The man who hates to act under pressure will have to consider his moves quickly, and his travel to Serbia has been cancelled. The longer he waits, the higher will be the political price. He needs to restore order and stop rage from accumulating. Students and nurses already plan to join the gilets jaunes next Saturday. Built-up rage against politicians disconnected from people's lives could be fertile ground for populists. The worst-case scenario would be that Macron, who set out to stop populists, ends up feeding the underlying current. 

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