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January 14, 2019

Our Brexit predictions

Beneath the large number of headlines suggesting massive troop movements, there is eerie quiet - of the before-the-storm kind. Theresa May will lose her meaningful vote tomorrow. Jeremy Corbyn will at one point table a vote of no confidence, probably next week. And MPs are scheming.

The reality remains that there is no unified majority around any alternative to the current deal. This is why Dominic Grieve’s attempt to seek control of the House of Commons' timetable is ultimately not as important as the Sunday Times suggested yesterday, when it broke the story. Also, as the FT notes this morning, Grieve's motion is unlikely to succeed for a number of technical reasons. 

A far more plausible scenario is one of deals and counter-deals. Theresa May will lose her vote tomorrow, possibly by a smaller number than forecast. Jean-Claude Juncker will write her a letter to say that the backstop is temporary. Negotiations on the wording of the political declaration were still going on over the weekend. 

As Mujtaba Rahman (@mij_Europe) suggested in an informed series of tweets yesterday, the EU might go further and agree to amending the backstop, but only after it becomes clear what the House of Commons wants. We, too, have been arguing that the EU’s position is more flexible than official statements suggest. Wolfgang Munchau writes in his FT column that the EU could do even more: open up the withdrawal agreement, and formalise the position it has already taken informally - of ruling out an extension of Art. 50 except to give extra time for the ratification of a deal that is approved in principle. 

We also noted that, to the extensive frustration of his supporters, Jeremy Corbyn yesterday said he favoured what he called a negotiated solution over a second referendum. Corbyn seems to have shifted his views on freedom of movement, which is a more important development because this could form the basis of a compromise. The UK could, for example, settle in favour of the Norway option. We don’t think that this would be superior to the deal May negotiated, but it is surely superior to extreme options of a no-deal Brexit or a second referendum. 

And finally, FAZ reports that the EU is woefully unprepared for a hard Brexit. We are not surprised. The EU has discounted this possibility from the outset, and has thus not devoted any serious energy and funding to solving the problem. Germany has only just created financial room for 900 new jobs to deal with extra customs modalities that would be required to handle the massive amount of German exports to the UK. But this is not enough to avoid complete chaos. The best way forward, FAZ writes, would be for the UK to join the EU’s Common Transit Procedure as a third country. This treaty is used to facilitate trade with Norway and Switzerland, which are also not in the EU’s customs union. This would allow customs procedures to be shifted away from the physical border. There is, in other words, a notion of a managed no-deal. There are very good reasons to object to a no-deal Brexit. But queues at Dover are probably not the most important one.

Wolfgang Munchau writes: Here is my prediction/expectation of the process as of January 14. After tomorrow’s defeat, there will be a serious cross-party attempt to map out an amended version that seeks to accommodate a number of alternative views: the EU will have to offer different language on the Irish backstop (without sacrificing the principle); the political declaration will need some amendments; the UK parliament must be given the leading role in the definition of the future relation. The political declaration needs to be amended, not to prescribe any concrete alternative to May’s Canada-Plus deal but to make them possible in principle. For example, the EU is not in a position to offer EEA membership, as this would also require the explicit consent of the EEA members themselves.

My main scenario is that the amended deal is passed. But, if not, I think the next procedural step would be new elections followed by another parliamentary vote on the then-latest version of the deal. Under any likely outcome of the election, a deal will then be passed.

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January 14, 2019

1789 - Macron's version

Brace for two months of the grand débat in France. Emmanuel Macron officially opened the floor for the direct consultation with citizens at the municipal level, starting tomorrow and lasting until March 15. The Five Star Movement might have their social network platform Rousseau, but Macron is counting on the local mayors and their administration for this exercise in participative democracy.

In a letter Macron invites the French to express their views of how they want the state to operate and how citizens are to participate. Structured, yet open in its remit, the letter aims to give the gilets jaunes the feeling that they are heard, but only if they refrain from violence. The 35 questions Macron put out in his letter raise the issues of fair taxation and public savings, administrative decentralisation, environmental transition, and transport, as well as more participation through elections or referenda. The letter also put on the table the hot topics of immigration and secularism, asking about how to integrate immigrants in French society and what the relationship should be between state secularism and religions. His most concrete questions are about how citizens are to participate in a democracy, and are likely to become the focus of these debates.

Macron promises to take the results into politics, reflected already the European elections. It is a brave move that has a chance to calm down the gilets jaunes or to frustrate everyone with an even bigger wave of public anger to come. 

So close to the European elections this is a risk not only for France but for the EU as well. Marine Le Pen already sees the European elections as a means to vote anti-Macron.

Even without the rise in public anger, these consultations still can produce uncomfortable results for Macron and his government. Pressure groups can push some of their issues to the forefront, and the network could be overburdened with producing conclusions from such a vast exercise. 

We were reminded of the cahiers de doléances in 1789, the open books where everyone had the chance to express their hopes and grievances directly to the King Louis XVI before the états généraux led to the French revolution. Macron must hope he will be both Louis XVI and Lafayette, with the good people listening to the latter pleading to leave the former on his throne.

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January 14, 2019

Tsipras calls confidence vote after Kammenos pulls out

There was much fuss in Greece about the survival of the Greek government after Panos Kammenos announced his resignation from the government. So far only Kammenos and his deputy minister Maria Kollia-Tsaroucha resigned their government posts.  Tsipras called a vote of confidence, with his 145 MPs he needs another six to come up to 151 votes to win. According to Kathimerini's count this should be possible. If he does not secure the 151 votes he is aiming for, he will be under pressure to set a date for Greeks to go to the polls in the near future, certainly before the European Parliament and local elections towards the end of May, writes Macropolis. The confidence vote will be held Wednesday or Thursday this week.

In Macedonia, meanwhile, the parliament cleared the last hurdle and adopted the constitutional amendments for the Prespes agreement to be passed on to the Greek parliament.

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