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January 29, 2020

French democracy and how to voice dissent

The scenes of police fighting with firefighters in Paris look like a breakdown of public order. Videos of riot police using batons and shields against protesting firefighters in Paris went viral yesterday. Firefighters were on the streets and even set themselves on fire to protest for better pay and working conditions. France may be known for its clashes between protesters and riot police, but firefighters are heroes in the public perception. Marine Le Pen was quick to make Emmanuel Macron responsible for this disunity in the country. Many tweets also link the clashes directly to Macron and his image of an authoritarian ruler against his own people. There is much hatred building up against the French president. Robert Badinter, the well-respected former justice minister who abolished the death penalty under François Mitterrand, reminded all sides that in a democracy nothing excuses violence. Citizens have rights and the means to show their discontent, but under no circumstance are allowed physical violence. Political leaders as well as voters have their responsibility in this deteriorating political climate. It starts with symbols: protesters carrying a carboard box representing Macron's head on a pike recalled death by guillotine, he said. Symbols such as these are toxic.

On a less violent note we are watching the municipal elections and the hype over the LREM-dissident candidate Cédric Villani, a Fields-medal-winning mathematician who is now running to become mayor of Paris. Emmanuel Macron tried to persuade him to back the official LREM candidate when they met on Sunday, but Villani decided to run as an independent. Villani has no illusions of winning this race. His ambition is to remain faithful to the ideals Macron stood for on the presidential campaign trail, for a smarter and more creative society. This campaign could become a marker of how far Macron has turned away from his promises. Two more MPs have left En Marche, bringing the total number of deflections to about 20 since the parliamentary elections in 2017. This is not massive and there is no organised effort against Macron's policies witthin the party, unlike what happened to François Hollande. But it is a sign nevertheless. Stéphane Dupont recalls that a majority of the En Marche MPs came from the centre-left.  The stand-off with the CFDT union over the past weeks has left its mark, as did the promised climate package that never came. Left-of-centre LREM MPs might find this a hard time to be in the majority, as Macron keeps a firm posture in the pension reform stand-off with trade unions.

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January 29, 2020

Whatever happened to the SPD’s revolution?

Remember the two new SPD leaders, including the guy with the double-barrelled name? The one that based his campaign for the leadership on his scepticism of the grand coalition? It is coming to nothing. FAZ believes that the leaders changed their position the very minute they took office. Rather than leaving the grand coalition, they would like to watch over it with a critical eye, they now say. So this means that the coalition will last to, or close to, its bitter end in 2021 before being replaced by something else. We would not rule out a cosmetic early election, for example in May 2021 rather than in September.

The SPD is not in a position to jump because the new leadership failed to bring the much hoped-for boost in the party’s poll ratings. The SPD still languishes at 12-15%, well behind the Greens, who have stabilised at 21-24%. There was a short moment when the new leaders could have jumped out of the coalition and ditched Olaf Scholz in the process. But the party was not ready for snap elections. Scholz is now effectively back in charge, having recently reaffirmed his personal commitment to fiscal surpluses. The new leaders committed the rookie mistake of politics: to miss their moment. They had a short window. We expect them not to last long beyond the next elections. 

Tonight’s scheduled meeting of the coalition committee was supposed to be the moment of truth for the grand coalition. There is still the usual potential for disagreement, but the acute threat is now gone. The 2019 federal surplus has given both parties some limited room for manoeuvre for extra spending. 

The total maximum amount for distribution is relatively small, about 0.5% of GDP. This is the size of the 2019 federal surplus plus some unspent money from a fund earmarked for refugees. They won’t spend all of it. The SPD wants to reserve the entire amount of €17bn for new investments. This is still a lot less than what the new party leaders had promised: €500bn over a decade which comes to roughly €50bn a year.

The CDU/CSU wants to invest in hospitals, but reserve most of the windfall to make up for tax cuts for individuals and companies, and especially to cut a levy that subsidises renewable energies.

They will find a compromise. They always do. It would not be unreasonable to assume that the loot will be roughly divided in half, between investments and tax cuts. This means €8-9bn for investments, which would be only some 15-20% of what the SPD leadership wanted. This is the metric of how the SPD's plans have deflated. And this is a good as it will get. 

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