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September 06, 2019

After an extraordinary week, what are Johnson’s options now?

The tide is turning. The Brexit extension legislation will go through, unimpeded, possibly as early as today. And Boris Johnson now appears to have lost the fight for an early election, before October 31. He and his team miscalculated parliament’s willingness to grant an election. It turned out to have been a huge tactical error for him to withdraw the whip from 21 Tory rebels - if only because he would have needed their votes to trigger an election. The combination of prorogation of parliament and the suspension of 21 Tories was simply too much for the British soul. They are now all panicking. You can tell this is the case when they start blaming advisers, like Dominic Cummings in this case. 

Even the touted possibility of the government launching a vote of no-confidence in itself would probably not work now, because the united opposition would fail to support it. Yesterday, Labour and the SNP got together and agreed to frustrate any attempt for an Oct 14 or 15 election. They fear that Johnson would win it. We agree. What we are struggling to understand is why they believe that Corbyn’s prospects are better as a result. We think the opposite is the case. Maybe some believe that the EU will offer a long transition - until after the scheduled election in 2022, and that the UK parliament would then accept that offer. 

We have yet to understand why team Johnson is not frustrating the anti-Brexit legislation through one of the means we have outlined in recent days. The media are silent on this point. If readers have any information on this particular point, we would like to hear it. Maybe they received legal advice. Or they concluded that any further involvement of the Queen would backfire. It is also possible - in theory - that they have a better plan, but we should probably not overestimate their strategic acumen. They certainly did not game the election scenarios carefully enough. The two-thirds majority threshold in the fixed-term parliaments act was always, and remains, formidable.

So what can Johnson do apart from cranking up the rhetoric, like the pledge that he'd rather die in a ditch than ask for an extension? What will he do when the request for an extension is the law?

One option for him is to resign shortly before the critical Oct 17 EU summit. At that point the Queen would have to appoint the leader of the opposition as prime minister. Corbyn's sole job would be to ask for a Brexit extension and make way for elections afterwards, since he commands no parliamentary majority either. The election scenario would be the same as it would have been on Oct 14 - a choice between Johnson and Corbyn. It would make it harder for Johnson to campaign on a Brexit delivery theme when he so clearly failed to deliver Brexit. At the same time, it would allow Johnson to accuse Corbyn of surrendering to the EU, or betrayal of Brexit. The outcome would depend on whether Johnson and Nigel Farage would manage to unite. The election campaign would be horrendous.

Another option for Johnson is to defy the Brexit bill, and risk being impeached by parliament. This is what Robert Peston was suggesting yesterday. Impeachment in the UK is an ancient procedure to try individuals for high treason that is now considered obsolete, in contrast for example to the US. But would it not be easier for parliament to launch a vote of no-confidence and install Jeremy Corbyn in Number 10? We presume that the LibDems might hold their nose, but maybe not all opposition MPs would support Corbyn.  

A third possibility is for Johnson to find some way for the EU to reject the extension. This is probably the smartest choice, but requires a strategy the UK has not yet deployed. The UK could refuse to comply with EU demands attached to an extension, like appointing a European Commissioner. The UK could co-opt another member state ready to wield a veto - maybe against the promise of preferential treatment for its citizens after Brexit. Maybe Johnson could tell the European Council that the request for an extension was forced on him by his parliament, and that the European Council would risk a very disturbing period unless they refuse this reluctant request. 

The fourth and least likely possibility is for Johnson to agree a deal. This is something he could have done after an early election. 

There is a silver lining for Johnson. The Labour Party is not doing itself any favours. Since the current parliament is not in a position to settle Brexit one way or the other, there is logic to an early election. Voters would not be happy with another Brexit extension. They want to get this over and done with. It was the April extension that put a premature end to Theresa May’s premiership. 

Johnson is receiving a lot of bad media coverage now, but five weeks without parliament will give him an opportunity to reassert his authority. His party's conference will undoubtedly reward his uncompromising stance on Brexit. Things might look different then. A reminder of the weakness of Labour’s Brexit strategy came last night on BBC's Question Time when Emily Thornberry, the shadow foreign secretary, struggled to explain the party's official policy. Labour would renegotiate, put the deal to a referendum, and then campaign against its own deal. This construction is obviously a fudge to cover up deep disagreements inside the party. We don’t think this position would survive an election campaign.

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September 06, 2019

Macron’s grip on the EU

This story in the Huffington Post Italia comes with a health warning from us. If true it would be a classic scoop - getting the portfolio allocations for the new European Commission several days before they are due to be announced. Since Italian journalists tend to talk mostly to Italian politicians, Paolo Gentiloni himself is a plausible source. He will be the new Italian commissioner, and he would have had discussions with Ursula von der Leyen about his job. In that process he would have picked up who gets what.

Gentilone is considered for macroeconomics, the job now occupied by Pierre Moscovici. It will be interesting to see how putting an Italian politician in charge of budgetary supervision goes down in places like Germany or the Netherlands. 

Sylvie Goulard would gets competition at the behest of Emmanuel Macron. In case anyone wondered how France and Germany would deliver on their new interventionist industrial policy, this is how - by appointing a commissioner with a specific mandate from Paris and Berlin. Despite her recent stint at the Bank of France, Goulard has relatively little experience in economic policy. She is also very likely to define competition policy not in terms of law enforcement - as Margrethe Vestager did - but in geopolitical terms. With von der Leyen as Commission president, Goulard at competition, and Gentilone at economics, Macron has his dream team placed across the most important portfolios. Not to mention Christine Lagarde at the ECB.

Another option under consideration for Italy had been the trade portfolio, but this now is expected to go to Phil Hogan, the Eu's current agriculture commissioner from Ireland.

Huffington Post notes that Italy’s Partito Democratico now has a European dream team in place, with Gentiloni at the Commission, Roberto Gualtieri as finance minister, and David Sassoli as president of the European Parliament. Luigi Di Maio, the Five Star parliamentary leader, will be foreign minister. But the job of European affairs minister goes to the PD's Enzo Amendola.

It is astonishing how Macron managed to tweak the entire appointments procedure in his favour. He has got his favourite candidate in all of the top positions, and his influence will reach deep into the von der Leyen Commission. Macron even pushed Goulard's appointment through against the advice of François Bayrou, her former boss and Macron's ally, with knock-on effects for the alliance between En Marche and MoDem ahead of the municipal elections.

The European economics commissioner will not only have to deal with the inevitable fiscal overshoot in Italy, but also with the difficult question of a reform of the eurozone’s fiscal rules. So, after an Italian changed the rules of monetary policy, the northern member states will now see another Italian change the rules of fiscal policy. 

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