Ideas Monitor #29/2017

Brexit and Labour’s choice

Over the past week, on The Guardian, many op-eds have been dedicated to the Brexit negotiations and, more precisely, to the Labour party’s stance on the matter. The editorial board of the daily claims that both government and opposition should not eliminate prematurely options that might become vital for the UK economy. In particular, the authors argue that “there is no predetermined model for Britain’s future relationship with the EU”.

One reason for the British newspaper to express its views is given by the interview that the leader of the Labour party, Jeremy Corbyn, gave over the weekend on the BBC. Corbyn argued that leaving the EU equals leaving the European Single Market. Nevertheless, the editorial board of The Guardian seems to disagree with this position.

Likewise, Polly Toynbee writes that Corbyn’s position is not only technically wrong but falls short of recognising the tactical and strategic choice the Labour party needs to confront. Citing a recent poll, Toynbee argues that 8 out of 10 Labour party supporters back the UK remaining in the Single Market. The author claims that “a future Corbyn-lead government would have endless scope for welcome radical social reforms”, even within the Single Market.

Both commentaries were indeed a reaction to a precedent article written by shadow Trade Secretary Barry Gardiner, published in the same newspaper. Gardiner wrote that “Labour has been right to say the government must focus on the outcomes rather than the structures. The key is not to try to fit these political and economic requirements into inappropriate existing bodies such as the EEA or the customs union, but to develop a bespoke agreement based on what both sides need”.

Macron’s first hurdles

As a French poll revealed a drop in the support for the newly elected President, many commentaries deal with the prospects of Macron’s legacy. On Politico, Dalibor Rohac issues a warning to the leader of the political movement, La République En Marche (LREM). Rohac claims that Macron might fall into what he calls the “Sarkozy trap”, namely a situation that resembles the one experienced by former Conservative President, Nicolas Sarkozy, 10 years ago.

At that time, after a rocketing start in office, Sarkozy was soon confronted with the deeply entrenched resistance of the French civil society to any major economic, political and constitutional reform. Rohac calls for Macron to exploit the current period of “extraordinary politics”, namely the window of change and possibilities that his success implies. More precisely, the author argues that Macron needs to move ahead as rapidly as possible with the labour code reform he announced earlier this year.

A more critical take on Macron’s politics can be found on the pages of Mediapart. Romaric Godin writes that, eventually, the “politics of neither left nor right” has been overwritten by a return to the politics of austerity. Referring to Macron’s electoral campaign, Godin writes that what might have appeared as an overtaking of neoliberal policies, became nothing but a delusion.

In an interview published on IRIS, Christian Odenhahl takes a different stance on the recent reform attempts of the French Government. Odenhahl claims that Macron is interested in reforming the national economy in order to engage in arm wrestling with German Chancellor Angela Merkel over the prospects of European governance reform. In other words, according to Odenhahl, Macron needs to show internal commitment to a reformist agenda, in order to expect a similar attitude from Merkel at the European level.

Between the inflation trap and a sort of revolution

The evolution of the European economic outlook continues to be one of the main topics of discussion among intellectuals across Europe. On Social Europe, Daniel Gros argues that the European Central Bank (ECB) entered a sort of “inflation target trap”. Gros writes that although the economy is recovering and growth rates are back on track, the ECB is not giving up its loose monetary policy only because inflation is still not getting close to the 2 per cent target. This depends mostly upon the fact that the ECB is the EU’s average inflation as its benchmark. However, as Gros says, “it makes no sense to continue with policies designed for a thunderstorm when sun is shining again”: the ECB should rather start exiting its emergency policies.

On the same site, Anatole Kaletsky focuses on France’s future economic policies and what he defines as a potential “macroeconomic revolution”. After discussing the pitfalls of market fundamentalism and its relation to the populist surge, Kaletsky argues that, ten years after the outbreak of the financial crisis, there might be space for an unexpected combination of redistributive and liberal economics. After Macron’s election “[this] idea is gaining support in Germany and among European Union policymakers”, Kaletsky writes.

This Ideas Monitor is by Carlo Burelli and Alexander Damiano Ricci

Photo Credits CC: Garry Knight

Also published on Medium.