🚨MODEL UPDATE TIME🚨
Two days after the election what do things look like for Ursula von der Leyen in her bid to get 5 more years?
In short, very good.
- no talk of a challenger
- Macron weakened and busy at home
- EPP emerged as clear winner & VDL is their clear figure-head 🧵 If someone, like Macron, wanted to put forward another name, he'd be laying the groundwork ahead of the EU leaders' dinner on Monday. Not happening.
VDL has support from Tusk and Mitsotakis, the big beasts of her party
For me she has 95% chance of getting picked by leaders

EU elections: the focus is obviously on the startling news in Paris.
But one of the key outcomes will be on who gets the EU top job, the presidency of the Commission.
After tonight I think Ursula von der Leyen is likelier to get a second term -- but pitfalls are still there 🧵 There were always 3 stages VDL needed to pass to get a 2nd term.
- EPP (her party) wins elections
- Gets nominated by Council
- Gets apprpved by Parliament.

EPP have come out 1st - and handsomely. I thought it was likely (90%) now it's done. That risk is gone.

🚨BRUSSELS BUBBLE ALERT🚨
I've built a model to play out what the post-election race for president of European Commission looks like.
In short, I think there's a 62% chance of von der Leyen getting a second term.
That is still a very high % chance of a change in EU leadership
🧵 The base case is that
- EPP wins elections (90%)
- then VDL gets nominated by Council (85%)
- then parliament votes, which I think is 70% odds -- will change a lot depending on election results
90% x 80% x 70% = 54% change that happens

See below for odds of all likely outcomes

FT asks: "Can Europe’s economy ever hope to rival the US again?"

A reminder that once you strip out population and dollar strength (which doesn't impact living standards in Europe), countries in the EU are *converging* with the US, not falling behind. ft.com/content/93f882…
There are lots of caveats here -- CEE "catch-up" growth is a factor, Europe is working ever-fewer hours, GDP isn't the whole story, US debt-fuelled growth in last 3 years contrasts with war-damaged Europe, etc etc. But the underlying data is so much less bad than some make out

I keep hearing "the far-right will make big gains in EU elections". While this may turn out to be true, it is NOT reflected in the current polling. So far indications are of a pretty modest rise.
In short: 2024 will look much like 2019.
A few thoughts 🧵 There are two models of EU elections: Politico and Europe Elects. It's hard to tell how either works, in part they seem to extrapolate national results (eg in Dutch elex) and assume voters will turn out the same way in EU elections. europeelects.eu/2023/11/30/nov…
politico.eu/europe-poll-of…

EU top jobs. Who is gonna get them? A few thoughts I'd like to test out.
After the EU elections in June, EU leaders will have to pick a new Commission president, Council, foreign policy chief, and will weigh in on NATO.

Who gets what? 🧵 Easiest is president of the Commission: I'd say 90% likely Ursula von der Leyen gets another 5 years. Except if she fancies NATO, but I see no evidence of this. She gave a recent "state of the union" speech that was very campaigny. Assuming EPP gets most seats in June, it's hers.

In recent months a narrative has emerged that Poland (and its Central Europe allies) are now bigshots in the EU. Because of the war in Ukraine, they are building a rival to the Franco-German motor, which is itself in trouble.
But I think 3 recent events show how wrong that is.🧵 Power is hard to define, especially within the EU. But put simply it is the ability to get others to go your way. Can you get the EU to satisfy your priorities?
You can tell France is powerful by how much the EU helps farmers. Same with northern Europe & "net zero" green rules.

This quote from the Indian foreign minister @DrSJaishankar has proved enduring.
"Europe has to get out of the mindset that Europe’s problems are the world’s problems but the world’s problems are not Europe’s"

But surely this is nonsense? Every bit should be rebuffed. A 🧵 Why does the quote matter? It is a justification for India and other "non-aligned" countries to go soft on Russia. And to keep trading with it. India is getting very cheaply crude that others are boycotting to throttle the Putin war machine.

In the 10-20 years Europe and America have taken different paths in regulating big companies. In a nutshell, America was relaxed about mega-corps with big market shares, Europe was much more in the "trust-busting" mode. The EU approach looked way wiser. I think that's shifting 🧵 America for years looked like a poster child for complacent competition authorities. Airlines and telcos consolidated and bilked consumers. But most notably tech giants like Google, Amazon, Apple and Facebook were "allowed" to build huge empires.

My Charlemagne this week is on cut-and-paste policymaking: why politicians should look at what their neighbours are doing and steal their best ideas.
AND I start with 6 schemes from across Europe that all governments ought to consider.
The winners are…🧵
economist.com/europe/2022/11… Good policy that should be copied 1 of 6: Portugal's approach to narcotics. Decriminalize them. Treat drugs as a problem of public health, not public order.

France votes today.

A lot of the focus has been on Le Pen. We've had weeks of "What if she wins?" or "Even if she loses, she's changing France!"

But the candidate who matters is the one who wins.

That's going to be Macron. And his re-election matters more than his 2017 win.🧵 First, let's put the rise of the far right in perspective.
Indeed in 2002 Le Pen (père) got 18% of the runoff vote, in 2017 it was 34% and this time it will likely be higher.

That is more a feature of the evolution of the party than the country.

Quite a lot of finessed language in the EU statement. It is clearly a ramp-up in sanctions, no doubt about it. But not yet 100% clear it is the cut-off-the-gas style embargo many are pushing for. Will have to look at the fine print to gauge that.

https://twitter.com/vonderleyen/status/1497696378461593605

I'd be very sceptical of anyone who tells you "the Russian central bank stuff is a huge deal!" or "none of this will matter". Unless they are real insiders with in-depth knowledge of financial plumbing, just ignore them.

The FT's most-read piece is on how to read more. I changed my reading habits a couple of years ago, having gotten into a books rut, and below are my tips as to what works. ft.com/content/6783bf… Always have a book with you. Snatch opportunities to read. A 12-minute bus journey is 12 pages. Do that every day you've added a dozen books to your reading list.

I started my reign as @TheEconomist Charlemagne this week. It is an occasion that warrants a sweeping take. In this case, I questioned how the European project will navigate the age of Big Government we are entering post-covid. A short summary 🧵. economist.com/europe/2022/01… Critics deride the EU as a bonkers that measures the curvature of bananas. And that's on top of meddlesome governments!
But it's often the opposite: Brussels often tells govts what *not* to do. Schengen = don't do borders. State aid = no subsidies. Euro = don't devaluate, etc.

Macron says he's happy to "emmerder" the unvaccinated for as long as it takes. That will lose him precisely 0 votes given his electorate. But I reckon 90% of the vaxxed, who are having to deal with kids getting tested, hospitals full, schools out etc, are heartily in agreement. On the vocabulary used, Macron is criticised for the use of "emmerder" - roughly as crude as "to piss off".
But this is careful wording. Pompidou's most famous quote was how the state had to stop "emmerder les Français". So makes it difficult to argue it's unpresidential language

THE STORY OF EUROPE'S CORPORATE DECLINE

20 years ago, 41 of the world's 100 most valuable companies were in Europe. Now the figure is down to 15.

What on earth happened?

We take a look at this in this week's @TheEconomist cover package.

economist.com/briefing/2021/…

A 🧵 Europe's fall from the top tier of global business has been spectacular.

We call it "The Land that Ambition Forgot".

Remember the era of Nokia, Ericsson, BP, Vodafone? All were among the world's top 10 companies.

Look at profits, sales, etc - on every metric Europe has faded

This week ends the annual moratorium on expelling tenants in France. For several winter months (it was extended this year) even tenants who don't pay can't get kicked out. It is "treve hivernale" - the truce.

A heart-warming policy with *terrible* consequences for the poor. A 🧵 It is more or less impossible to kick out a tenant in France, whether they pay or not. I have come across instances of landlords who don't even try to claim unpaid rent, but will PAY tenants to leave.

In this news item the tenant hasn't paid in 5 years

https://twitter.com/RMCinfo/status/1399588330967289856

One of the main reasons vaccination rates are so low in Europe is down to supply. And one of the reasons supply is low is because EU ordered doses late. Why? It seems the issue of liability is important. A thread on how to think about the main issues at play. 🧵 What is liability? In short, if something goes wrong (e.g. people die as a result of being vaccinated, or have nasty side-effects) it is the manufacturer that compensates victims.
Generally speaking this is smart: you want people to make things to be responsible for their quality

I see the argument that "banks should not be banned from paying dividends" has resurfaced today, made by Morgan Stanley's boss. I disagree. I think bank dividends should be suspended this year.

A thread. Dividends are a healthy part of capitalism - it's good that companies pay them. Even in this period, if companies are profitable (and haven't had to plead to governments for bail-outs) I see no reason they shouldn't pay them.

Banks are different.

There is an argument gaining traction that every country will now need to be self-sufficient in things like manufacturing masks. A line pushed, for example, by Thierry Breton, an EU commissioner, this morning.

But this is a bad idea. A thread 🧵. Is there a mask/gown/protective equipment shortage at the moment: absolutely

Would having such masks/gowns help combat the pandemic: without a doubt

Will we need lots more masks in future: I imagine so

Does it follow that we need to make them in France or Europe: not at all

The Times (UK) has an entire leader premised on a statistic that nearly 1/2 of all flights taken by men 20-45 are for stag parties.

It is based a PR survey, predictably, and even the most cursory inspection of the figure shows the figure is absolute bollocks. A thread... To get to a credible statistic, you need to figure out the total number of flyers, how many are in 20-45 age group, and how many are likely to be flying for stag parties.

Let's make lots of assumptions and see where we land.