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January 16, 2019

And now think about this standoff from the perspective of the EU

The EU is clearly not prepared for this standoff, and initial reactions were all over the place. We agree with Jean-Claude Juncker’s assessment that the chance of a no-deal Brexit has increased. Donald Tusk seems to have concluded the opposite in a tweet: that the UK is headed for Brexit revocation. Heiko Maas, the German foreign minister, called for renegotiation. But, like so many Germans, he has not fully acquainted himself with the complex technical and political issues of Brexit. One Berlin correspondent quoted a German politician calling for an unconditional, not time-limited extension of the Brexit deadline. But that person seems not to have read Art. 50: it would be have to be requested by the UK first. And, from the perspective of the EU, it would be political madness to go down this path as it would have severe implications for the balance of power within the EU itself.

Pro-Remain UK commentators have marvelled at the unity of the EU during the negotiations, but this unity was critically premised on the assumption that the UK would never crash out of the EU without a deal. Once the realisation sets in that this may not be so, expect divergent interests to come to the surface. From a simple perspective of political risk management, Germany has no interest in exposing its car industry to tariffs from the UK as well as to tariffs from the US, especially when the Germany economy may be on the verge of a recession. 

What will the EU do? First of all, the EU will need to wait for the next steps taken by the UK. If the process goes as we describe above - a continued standoff - then the EU might want to reopen the withdrawal agreement and reconsider the Irish backstop - offering legal guarantees and possibly a formal end date. 

Alternatively, if Jeremy Corbyn were to come to power, the EU may agree an extension in order to negotiate a fully worked-out customs-union arrangement. It is possible that a prime minister Corbyn would formally revoke Brexit in order to negotiate a customs union agreement with the EU while the UK remains a full member. It remains to be seen whether such action is consistent with the recent ruling of the ECJ, but we note that the ECJ has given the EU little protection against abuse of the Art. 50 procedure. A renewed trigger of Art. 50 would be folded into one process with a final agreement. Art. 50 gives a two-year window, but does not preclude an earlier agreement. Change of government, unilateral revocation, followed by a renewed trigger, seem to us a plausible way forward.  

As the legal journalist David Allen Green pointed out yesterday, yesterday’s vote in the Commons was not the most important vote MPs have ever taken. It was the vote when they triggered Art. 50 without having a concrete plan.

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January 16, 2019

What can the French learn from Brexit?

What can the French learn from the Brexit debacle? Last night in Westminster MPs from all sides were vying to have the last word while Theresa May accused those who voted against the deal of not respecting the will of the people. How to translate the will of the people into a meaningful vote? What is the will of the people? 

To find the answers to these questions the French are embarking on their own version of participative democracy, with two months of citizens' consultations in towns throughout France, and the modern version of the cahiers de doléances online where everyone can register their grievances . Yesterday Emmanuel Macron launched the grand débat insisting that nothing will be taboo in it. Will his fearless attack of controversial subjects help the grand débat to overcome the big divides in French society - the people vs representatives, the people vs the elites? 

Cécile Cornudet said that people have to start talking to each other to reach a consensus, rather than trying to force their point of view on each other. A battle about having the last word would only exacerbate the divide and will not solve anything politically. People need to want to participate, too, as too much controversy may drive away the reasonable people from the forum. The debate needs to also remain realistic in its ambitions, writes Étienne Lefebvre, rather than nourishing a fantasy world of options that are never going to be on the table anyway like we have seen time and again in the Brexit debate. 

There is a high risk that the debate is highjacked by outspoken protagonists with their particular agenda. And the even bigger risk that the biggest winners from the gilets jaunes movement could be the populists. We already see that traditional parties have a hard time finding their stance between Macron and the far right or the far left since the gilets jaunes took to the streets. Zaki Laidi predicts that the decomposition of the political landscape will continue. The other phenomenon is that among the gilets jaunes, supporters for Marine Le Pen and Jean-Luc Mélenchon are hardly distinguishable, but a populist radicalisation is likely to benefit Le Pen more than Mélenchon. Thus Mélenchon will not see Le Pen as an ally, in the di Maio/Salvini sense, but as a competitor to face Macron in the next presidential elections. Expect a populist bidding war ahead. 

The political landscape is thus no longer determined by the left-right divide but by the divide between reformers and populists. It will be the challenge of the grand débat to avoid another wave of political disillusionment and to get a solid ground for Macron's reforms not only as a rampart against populism.

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