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January 07, 2020

Europe's fast disappearance from the UK debate

It was understandable for the UK political scene to go on an extended holiday after last year’s political marathon. What we find interesting is the sheer extent to which Europe has turned from a singular obsession into a non-issue overnight. Some of the most prominent Remain campaigners in the Labour Party now say that the battle is lost, and that it is time to move on. Sir Keir Starmer, the shadow Brexit secretary and one of the leading candidates for the Labour leadership, did not mention Europe once in his slick campaign video. Instead he focused mostly on his record as a human-rights lawyer and on inequality. Among the candidates only Jess Phillips, a backbench MP from Birmingham, said she would campaign to take the UK back into the EU. But this was in response to a question. And she clearly hadn't though this through. The disappearance of the EU as a political theme is consistent with our previous observation that much of the Remain/Leave debate was a proxy battle for other political conflicts: between the interests of urban and rural Britain, the north vs the south, new elites versus old.

The debate about the UK’s relationship with the EU will, of course, return as a substantive issue. Brexit will happen by the end of the month, but the future relationship has yet to be mapped out. Tomorrow, Boris Johnson will meet with Ursula von der Leyen to discuss the scope and timetable for negotiations. Trade is only one of several points, and possibly not even the most important one given the most recent political events in the Middle East. The future relationship will clearly be among our foreseeable themes this year.

The expectations among journalists in the UK is that Johnson will invariably extend the transition period deadline of end-December. With a comfortable Commons majority, Johnson can do what he likes. Several events over the last few weeks have made us more cautious about a delay, though. 

The fixed-term parliament act will go, which means that the length of parliamentary terms will revert into a range of four to five years. On the basis of a four-year term, we would assume that Johnson would want to leave the transitional period well before the next election. But even a short extension would not buy enough time for a deep trade agreement, the kind that includes investment and requires ratification by member states and some regional assemblies. A minimal EU-level deal, by contrast, focusing on trade tariffs and rules of origin, can be done quickly. 

This leads us to think that Johnson may be favouring a narrow deal first, with additional bits added later and maybe some additional transitional arrangements for areas in which discussions will continue. So this may be not be such a black-and-white issue as it sometimes appears. Also consider that the EU cannot credibly take the negotiations to the brink, given its own commercial interests and the lack of a pro-Remain majority in the UK parliament this time around. The discussions will be much more symmetric in the sense that both sides would gain from an agreement, and would lose from a failure.

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January 07, 2020

How to de-escalate with Erdogan?

Recep Tayyip Erdogan is getting himself involved into a bloody battle in Libya. He is also adamant hat Turkey has a right to exploit the natural gas resources in the eastern Mediterranean, and willing to risk a full confrontation with the the EU over this. Moreover, his strategy for Syria is not clear yet. With several fronts open and prone to escalation, will Erdogan become even more unpredictable? 

Greece is concentrating its efforts on de-escalation of the situation, amid arguably the worst tensions in Greek-Turkish relationships since 1974. Foreign ministers from Greece, France, Italy, Cyprus and Egypt meet in Cairo tomorrow to discuss the developments since Turkey signed a maritime border agreement with Libya.

Last week Turkey’s parliament approved a military deployment to Libya just as Greece, Cyrpus and Israel signed the EastMed pipeline construction agreement. Turkey is now moving its military forces to support the struggling government of Libyan prime minister Fayez al-Sarraj against his opponent general Haftar, who controls most of the country and has the backing of Egypt, Russia, UAE and Jordan. Erdogan backs the government as a quid pro quo for Libya signing the agreement on maritime borders which Turkey is using to stake its claim on the Eastern-Mediterranean continental shelf for gas drilling.

The FT reports that Haftar entered the strategic city of Sirte as the battle for control in this oil rich country continues. The fall of Sirte, in the centre of Libya’s coastline, would be a blow to the government and may draw Turkey further into the war.  The Europeans, Greece and Cyprus in particular, will need to steel their nerves. 

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January 07, 2020

Working less for more

In 1930 John Maynard Keynes predicted that technological change and productivity improvements would eventually lead to a 15-hour workweek. We are not quite there yet, as most of Western cultures still work 40 hours on average. Fundamental changes will have to happen in the working world to allow such a shift. But there are already political initiatives out there to reduce working time significantly, and some evidence suggests that this could even improve productivity.

Finland’s new prime minister, the 34-year-old Sanna Marin, just called for a flexible working-time module to allow for a four-day day working week that increases productivity, and leads to healthier and happier employees and even a lower carbon footprint, so the Guardian

A six-hour-day working day was trialled in the city of Gothenburg in Sweden for nurses, who turned out to be happier, healthier and more energetic. Microsoft in Japan took a bold move and introduced a four-day week for their employees, and productivity went up by a staggering 40%. But introducing a four-day week is costly especially for services, a reason why it was abandoned in Gothenburg. Also it is operationally complex. This does not mean it is impossible. Manufacturing has seen many shifts in working hours over the last century. 

Will Marin's flexible work-time proposal fly in Finland? Finnish trade unions just resolved a months-long nasty dispute with employers resulting in a 3.3% pay rise. The battered employers might not have the appetite for such a costly innovation at the moment. And it is not clear yet how politically determined Marin will be to back up her proposal. Even if her four-hour week proposal does not fly, the trend may be inevitable. As artificial intelligence expands into many aspects of production, reducing work time will become a feature of our time. 

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