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August 05, 2019

No deal first, elections later

We have been writing for some time that elections in the UK will not automatically stop a no-deal Brexit. That also seems to be the view of Dominic Cummings, Boris Johnson’s enforcer. To precipitate an election before Brexit day, Jeremy Corbyn needed to have called for a vote of no confidence before the parliamentary recess started last month. 

The reason is that the prime minister is ultimately in charge of the election date. If a vote of no confidence were held on September 5, the earliest possible date, it would still be technically possible for elections to be held on October 24, the last election day that could produce a government to revoke Brexit or ask for an extension. But the timetable is in the hand of the government, not the parliament. 

This would imply that a successful vote of no-confidence could inadvertently trigger a no-deal Brexit as parliament would be dissolved at the end of October. Johnson could even hold the elections on Brexit day itself. No winner would be officially declared until the next morning - when Brexit could no longer be reversed.

We are now at a point in the Brexit discussions where legal and procedural details matter. We keep hearing commentators waffle about parliament stopping a no-deal Brexit. This is a legally and politically illiterate construction. Parliament can pass a vote to revoke Brexit. It won’t do that. Parliament could alternatively exploit the possibility outlined in the fixed-term parliaments act and elect a new prime minister - following a prescribed procedure. It could, for example, elect a government of national unity with the sole task to ask for a Brexit extension and to call new elections afterwards. But why would Jeremy Corbyn vote for a national unity government under a moderate Conservative when he could have elections instead? And what about the 20 or so Labour MPs who do not wish to frustrate Brexit?

So, there are exactly two ways for parliament to frustrate Brexit - national unity government and outright revocation. Neither is likely.

Sebastian Payne reports in the FT that Cummings had a good laugh when he heard about the suggestion that the government should ask for a Brexit extension after a vote of no-confidence. It is under no legal obligation to do so, and won’t do it. 

The big misunderstanding in the British debate is that the no-deal Brexit is already legislated. It is embedded in Article 50, and in the corresponding UK legislation. It is not a decision to be taken or to be stopped. It is what will happen if no other decision is taken. As we keep pointing out, it was Theresa May who extended Brexit earlier this year, not parliament.

We hope that the news reports over the weekend may lead to a shift of expectations in the EU. There is still a body of opinion in continental Europe that has bought into the narrative that parliament would stop a no-deal Brexit. If the no-deal Brexit happens, a lot of people in the EU will not have seen it coming.

In the UK, the election campaign has already started. As Payne notes there is already a lot of strategic gaming going on inside Number 10: if Corbyn were to align himself with the second referendum crowd, he would simultaneously destroy his own project and fail to stop Brexit, one official is quoted as saying. Payne also writes that the current thinking in Downing Street is for elections to be held in November. 

We agree with Peter Foster of the Daily Telegraph who noted that the normalisation of no-deal is perhaps the most amazing development in the Brexit debate. People aren’t as scared as they used to be - which itself makes it more likely.

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August 05, 2019

Free movement of labour? Not for politicians

Cross-border political carriers used to be a rarity. Daniel Cohn-Bendit is the default reference, but then again he was not a German politician before he entered French politics. We see more examples since Emmanuel Macron came to power, though.

There is Manuel Valls, former French prime minister under François Hollande, who tried to become mayor of Barcelona. He failed to get the post but is still in the city council and mingling in the Spanish political scene.

The latest is the Italian Sandro Gozi, a former undersecretary for European affairs uder Matteo Renzi. He was one of seven candidates with a non-French passport on Emmanuel Macron's Renaissance list for the European elections. Macron’s idea idea of transnational lists was frustrated last time around, but the inclusion of other nationalities on the existing list was a first step. Gozi was the most prominent. 

Gozi has now been appointed to advise prime minister Édouard Philippe on European affairs. This is a red line for the Italians, who accuse him implicitly or explicitly of treason. Luigi di Maio even wants the government to revoke his Italian citizenship now that he is working for another government: 

"You represent and serve the Italian state and then at some point you betray it and enlist for a different government. We have much in common with France, but we also have conflicting interests."

There is of course no chance of this to stand up in the European courts. Also Gozi's position with the French prime minister is low-key and time-limited to the 100 days before MEPs can take their seats, writes Le Monde. Still, the question whether the free movement of labour also applies to the political sphere is on the table as Leonid Bershidsky points out in Bloomberg.  Expect to see more of these cross-border controversies. 

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August 05, 2019

Europe already lost the digital battle

In some sense, we admire those who keep on putting pressure on the EU to do the things to defend its interests. We have also advocated a stronger international role of the euro, different frameworks for fiscal policy, and especially more investment into modern technologies - ideally embedded in a more federal European state. But we also note that this is not happening. 

Joschka Fischer belongs to those who are still hopeful. Writing in Project Syndicate he made an urgent appeal on the EU to plug the digital gap. He argues that Europe's command of AI, Big Data and related technologies will determine its place in the world. He writes it will determine the future of European democracy, and it will determine whether the old continent’s future will be one of prosperity or decline. Meeting this challenge would require a significant degree of policy centralisation - with massive investments ahead. The private sector will not do this alone. The EU will need to take the lead. We agree with all of that.

But we are not as open-ended about the conclusion. The decline has started. The digital gap is large and growing. The modern digital platforms are American and increasingly Chinese. The Airbus model worked, but the circumstances cannot be replicated. Airline manufacturing has a high cost of entry. It was that and the previous market domination by two US companies that offered the Europeans a break. It was also compatible with the way the EU operates, in that the model allowed for decentralised manufacturing. The digital world is simply too fast for the EU.

There are still many technological battles to be fought and won. But the digital battle is lost.

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