We use cookies to help improve and maintain our site. More information.
close

January 15, 2020

Philippe's not-so-generous compromise offer

Édouard Philippe made a gesture of goodwill and took the rise in the full pension retirement age off the table, at least for now. This was welcomed by the CFDT union and celebrated as a breakthrough. But this may turn out to be just a temporary concession, writes France24. Philippe asked trade unions to come up with alternative proposals to reach financial balance by 2027 without diminishing pensions or increasing the cost of labour. If trade unions and employers cannot reach an agreement, the government will take the necessary measures to ensure the pension fund will be balanced by 2027, so Philippe. 

Fixing an objective with a constrained set of options sets the trade unions up for failure. The pension reform talks could end up like the ones over the unemployment insurance reform in 2018.  Back then trade unions and employers failed to reach the requested €3bn in savings so the government took charge of the unemployment scheme, a first since 1982, and changed the system’s rules by tightening eligibility requirements and payout conditions. If the script rolls out the same way this time, the government could take back control of the reform at the end of April and order a rise in retirement age, while pointing to a failed negotiation to deliver an alternative. 

Critics warn that this proposal is even worse than the original one. It threatens to introduce the retirement age by government order, reduces the discussion time until April rather than September and prevents upper- and lower-house lawmakers from having their say.

Show Comments Write a Comment

January 15, 2020

What is Erdogan up to in Libya?

The Guardian has a report that Turkey is sending about 2000 Syrian militias to Libya supporting the government in Tripoli against the advances of general Khalifa Haftar. The deployment could stir up anti-Turkish sentiment among Libyans, play into the hands of Haftar and make ceasefire negotiations even more complicated. Yesterday Recep Tayyip Erdogan could not refrain from threatening to teach Haftar a lesson. Russia's official response to the latter's failure to signing a ceasefire in Moscow was more restrained. We have yet to see the next move from Russia.

Turkey and Libya have repeatedly denied the presence of Syrian fighters, but several deployments happened in December and January according to the British paper, which also has details of how the fighters are paid and cared for by Turkey. By letting Syrians fight in Libya rather than sending the Turkish military Erdogan avoids a direct clash in combat with Russian mercenaries. But will Putin give the green light, or will Russia retreat from the scene in Libya to focus its efforts elsewhere?

Turkey and Russia imposed themselves as big players in Libya by calling for a ceasefire, in a surprise move last week without consultation with other regional players involved in the country. Both have economic and geopolitical interests in Libya, but the unpredictability of events makes a quick fix elusive and has a political cost. The media is currently speculating on how Vladimir Putin will retaliate after Haftar snubbed him by storming out of the negotiations in Moscow without signing the proposed agreement.

The next step will be the peace conference in Berlin this weekend. Whether the Europeans are more skilled or better prepared than the Russians to handle the dynamics of the events and Haftar's temperament is doubtful given their track record. 

Show Comments Write a Comment

January 15, 2020

When it is noise and not a signal

There are issues where we as analysts are better off admitting that we don’t have a clue. For example, we simply don’t know Boris Johnson’s strategy for a trade agreement with the EU. We are not even sure that he has one. What a US journalist once famously said about Donald Trump applies to Johnson as well: we should take him seriously but not literally. So, when one day he puts the probability of a no-deal end of the transition period at zero and the next day he talks in terms of strong likelihoods, he is not signalling anything. This is pure noise. He has a record of bad forecasts, especially concerning his own actions. What we do know for sure is that he will change his mind when it is expedient to do so. 

We think it is fruitful to think of the pointers ahead that may reveal his strategy. We may find out soon. For starters, there is the issue of Huawei. The expectation is now that he may snub the Americans and accept Huawei’s 5G bid. In that case he will be aligning himself with the rest of the EU on an important issue of security and commercial policy. If he snubs Trump over Huawei, we would assume that Trump’s appetite for a fast-track trade deal with the UK would be correspondingly reduced. And we assume that Johnson knows that.

The next pointer will come in early February when the EU and the UK agree on the framework for the forthcoming trade talks. If the UK insists on a broad trade agreement that encompasses goods and services, that would indicate a willingness to extend the transition deadline. We think the EU and the UK may find it more attractive to explore multi-stop alternatives with selective transitions periods. The reason we think Johnson is unlikely to extend the transition has nothing to do with what he promised. A full-blown trade deal, negotiated on the shared-competence basis, would almost certainly takes us close to or beyond the date of next UK elections. He would risk another Brexit election, potentially with Sir Keir Starmer, Labour’s arch-Remainer, as leader of the opposition. The result of the Labour leadership election will not be known until April 4, though.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • May 22, 2020
  • Russia and Turkey double down in Libya
  • What to make of No 10's Brexit briefings
  • January 15, 2020
  • Philippe's not-so-generous compromise offer
  • What is Erdogan up to in Libya?
  • When it is noise and not a signal
  • September 11, 2019
  • What are the chances of a deal?
  • May 09, 2019
  • The EU's impossible dilemma
  • The horsetrading starts in Sibiu
  • May to bring withdrawal bill to Commons week after next
  • January 04, 2019
  • Will the AfD become the Dexit party?
  • Romania's corruption problem in the spotlight of its EU presidency
  • August 24, 2018
  • Towards a standoff between Italy and the EU
  • A short note on the diminishing role of economists in political life
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • December 20, 2017
  • Down with the gown
  • How to overcome the political gridlock in Italy
  • Varoufakis is suing the ECB
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • April 12, 2017
  • Macro in a state of denial
  • Where Schulz is vulnerable
  • Schäuble’s three party tricks
  • December 15, 2016
  • Scared of its own electorate
  • Towards a transitional deal
  • The comeback of Gerhard Schröder as the SPD's powerbroker
  • August 19, 2016
  • Brexit realities slowly dawning on the City
  • Opening shot for Hollande's campaign
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 19, 2020
  • Green policies get a boost from recovery efforts
  • Small Countries, small problems. Austria ready to compromise on recovery fund over Schnitzel
  • June 03, 2020
  • Brexit is back
  • Trump loses. Then what?
  • May 18, 2020
  • Why this won't be a symmetric shock
  • Towards a new cold war
  • May 04, 2020
  • What is and isn't true about the Wuhan lab conspiracies
  • Towards a new government in Ireland
  • April 20, 2020
  • What if we are wrong?
  • April 06, 2020
  • The feedback loop of Covid-19 and inequalities - part 10 of our series
  • How confinement affects mental health
  • March 23, 2020
  • Orbán seeks to extend his powers
  • UK as the double counterfactual
  • March 13, 2020
  • France closes schools but allows municipal elections
  • Multiply by ten
  • March 04, 2020
  • Why the Covid-19 numbers in Italy are rising faster than elsewhere
  • February 24, 2020
  • Coronavirus comes to Europe
  • Municipal elections - a precursor for Le Pen?
  • Germany and France get involved over Idlib
  • February 17, 2020
  • Security issues we should be discussing
  • Salvini has changed his mind on the euro - yet again
  • February 10, 2020
  • A new era in Irish politics with Sinn Féin
  • More fish, please
  • February 02, 2020
  • Is Sinn Fein the Irish anti-establishment vote?
  • Don’t assume that nobody will follow the Brits
  • January 27, 2020
  • How the left lays the ground for Le Pen
  • Project Fear - Irish Edition
  • January 23, 2020
  • Why the UK will triangulate carefully with the EU and the US
  • January 20, 2020
  • The EU in a diplomatic bear hug
  • French pension strikes come to a halt as violence grows
  • Scholz to stick to fiscal surplus in 2021
  • January 16, 2020
  • How the US blackmails the EU
  • What to make of the resignation of the Russian government
  • January 15, 2020
  • Philippe's not-so-generous compromise offer
  • What is Erdogan up to in Libya?
  • When it is noise and not a signal