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April 17, 2020

Should leaders cash in on their approval ratings and seek early elections?

South Korea rewarded President Moon Jae-in and his party for their handling of the Covid-19 crisis with a landslide election victory. Is this pandemic boosting the re-election chances or ruling parties also in Europe? If so, will this be true also next year, when the Germans, the Czechs and the Dutch are scheduled to hold their general elections? Or will some be tempted to hold snap elections?

Approval ratings for leaders in Europe skyrocketed during this crisis. This was more so for Angela Merkel and Boris Johnson than for Emmanuel Macron, but even the French president got an initial boost before French impatience set in. What happens once the lockdown ends and the economic consequences kick in fully? To be the man or woman of the hour in a crisis is defined by decisiveness as well as timing. Once the crisis is over other events intrude and people might want to move on. It will depend on whether the credit of crisis management still carries enough weight at the polling station, and how well the party manages the economy in the ensuing recession.

In Greece, media commentators are discussing the question of whether or not Kyriakos Mitsotakis should seek snap elections this summer or autumn, to cash in on his record-high popularity but also to get a fresh mandate for the tough decisions that the ensuing economic downturn will undoubtedly require. Macropolis writes the time of reckoning will come in the autumn, when the draft budget will have to reflect the economic shock. At that point the government will be faced with the inevitable political cost. This has led observers to speculate that Mitsotakis will seek re-election before the autumn.

But calling early elections has its risks, too. A public that is asked to forego Easter celebrations and to bear the economic consequences of a state of emergency is unlikely to react well to what some might see as opportunistic elections. Using the pandemic as a reason to meddle with the election calendar has already proven tricky. Macron had to find out himself that, despite the lockdown, he could not postpone the municipal elections amid stark opposition from the conservatives in the senate and the high council. Only the second round runoffs between finalists was then suspended. Also, given the uncertainty about the course of the pandemic and the timing of the end of the lockdown, the potential health risk of campaigning turns a hypothetical snap election into a high-stakes gamble, concludes Macropolis.

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April 17, 2020

Downing Street doubles down on Brexit deadline

We noted a lot of huffing and puffing yesterday by those who had forecast that Downing Street would extend the Brexit deadline. The FT had the story of a Downing Street official doubling down on the December 31 date. The comments are very firm, a definite No to any extension under any circumstance. But we should also remember that two months is a very long time in politics. Boris Johnson may change his mind. There would be no rebellion if he did. But we also have to remember that he has been remarkably consistent on Brexit. We would not bet easily on a prime minister changing his mind on his single most important political project. If it happens, it would be a big deal.

There are also some objective reasons to think Covid-19 should not make a material difference to the discussion. We are at the stage where the two sides - both professional negotiators - are trying to understand each other’s position at a deeper level of detail. They have exchanged their respective draft proposals. They are currently not negotiating, only seeking clarification. We are still on course for a UK government decision in June on whether there is enough common ground to proceed with the negotiations. The answer may well be yes, but we see no obvious reason why Covid-19 should make it necessary to postpone that decision on whether to proceed or not. 

There are two ways to look at the interaction of Covid-19 and Brexit. One could argue that the economy might be in a stronger position to manage the transition in the summer of 2021, after a vaccine is likely to be available, than in the middle of winter. The strongest argument in favour of a December transition is that companies are unlikely to reconstruct old supply chains until they have more clarity on the future regime. The economic benefit of an early decision might outweigh the direct costs of disruption, especially since these costs have already been incurred in the health crisis. 

The FT article also informs us that Dominic Cummings is back in Downing Street, having recovered from Covid-19.

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