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February 25, 2019

Deal versus short delay

It was a weekend of massive noise about Brexit, but in reality not much happened. Theresa May set a date of May 12 for the meaningful vote. And, to forestall the Cooper amendment on which the House of Commons is scheduled to vote this week, she is offering an alternative short extension under an alternative plan drawn up by Downing Street officials. This is - so far - separate from a third plan, drawn up by backbenchers, that also requires May to extend if there is no deal. 

A Guardian story yesterday raised some eyebrows with the claim that the European Commission prefers a long extension of 21 months to coincide with its financial framework. We doubt very much that the UK parliament will agree to this. The Cooper amendment has been drawn up deliberately without a time schedule to maximise support for it. We refer readers to our briefing on Friday when we listed a series of possibilities the government has to frustrate that amendment. There are two additional considerations for fence-sitting backbenchers to consider. First, the Cooper amendment does not amend the withdrawal bill. This offers government another route to frustrate it. And the Labour Party is slowly agreeing on supporting another amendment - piggy-backing on the Cooper bill - that would make agreement of the withdrawal deal contingent on a second referendum. The purpose of this amendment is merely to give the Labour leadership the opportunity to unite the party and the leadership. It has no chance of being adopted. And it may drive natural supporters of the Cooper amendment, such as pro-EU government ministers, towards supporting May's alternative version. 

So we are now left with the following scenarios:

  • House of Commons agrees withdrawal treaty in meaningful vote on March 12. Brexit proceeds on March 29, or a few days or weeks later after the EP has ratified.
  • WA is rejected. May proposes elections - plus short extension
  • WA is rejected. May requests short extension to prepare for no-deal, with the option of another meaningful vote in the House of Commons to avert it. 

In the end, if delay is an option the EU will always take it, which is why we are discounting the story about a long delay. We can see why civil servants favour this outcome. But the political impact of a long Brexit delay, especially on the Conservative Party, would be catastrophic given the prevailing views of the Tory party membership. 

We see May's strategy very much geared towards delivering for her party. She said this at a Tory rally over the weekend:

"Our focus to deliver Brexit must be absolute... We must not, and I will not, frustrate what was the largest democratic exercise in this country’s history."

We know that she has changed her mind frequently during the Brexit negotiations. But why would she want to put her commitment to deliver Brexit in such stark terms if she was about to agree to a 21-month extension?

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February 25, 2019

The astonishing weakness of Five Star

One of the biggest factors of instability in Italian politics right now is the inversion in the fortunes of Five Star and the Lega. While Five Star emerged from the latest national elections as the bigger party and is the senior partner in the current coalition, the parties' electoral fortunes have since reversed with the Lega having pulled ahead in the polls. The latest indication of the deflation of the Five Star Movement was the regional election in Sardinia. Exit polls suggest that the candidates of the centre-right and the centre-left won the lion's share of the votes, while the Five Star candidates ended up with between 13.5-17.5% of the vote. A year ago, Five Star was a party supported by 42% of Sardinians. We don't want to draw any firm conclusions from those exit polls - or from regional elections in general. Local factors intrude, and party loyalties are not as strong as they used to be. This could easily turn the other way. But the early indications are that the period of government is benefitting the Lega more than Five Star. The European elections are going to be a big test for the coalition. 

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February 25, 2019

The real threat is from the left not the right

In his FT column, Wolfgang Munchau argues that the centrist regimes of western democracies face a stronger threat from the left than from the right in the medium term. Munchau offers two reasons. First, the main issue of the populist right is immigration. This issue is likely to remain important, but probably not as important as it has been. Since the policies offered by the right - renationalisation of immigration policies in Europe, a wall in the US - are not going to solve the problem, the right's ability to win elections with anti-immigration platforms is limited. Secondly, new technological innovations are beginning to affect middle-class jobs, for example in Europe's car industry. We see this in the UK already, as Japanese car companies are shifting production back to Japan. It makes no sense for them to produce electric cars in Europe. Once the middle-class voters are threatened, they will be demanding protection - which they are more likely to get from the left than from the right.

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