Invalid Hungarian referendum will gain Orban little

Subject The Hungarian government's anti-immigration stance. Significance Prime Minister Viktor Orban and his government have been campaigning against the wave of migrants seeking refuge in Europe, and the EU's handling of the resulting crisis. The government hoped a referendum on October 2 would reject EU settlement of non-Hungarians in Hungary without parliament's consent. With a turnout of less than 50%, the referendum is null and void. Orban's Fidesz party nevertheless claimed victory, as 98.6% of those who cast a valid vote opposed relocation. Impacts The opposition to Fidesz will be able to frame the referendum as its first victory since 2010 and try to build unity on that basis. Fidesz will be unable to extend its popular support on the basis of these results. The EU is unlikely to react forcefully to constitutional amendments in Hungary, given Brexit and elections in France and Germany.

Significance The government led by the Slovenian Democratic Party (SDS) is under mounting pressure as Slovenia prepares to take over the European Council presidency. This is due mainly to hostility in parliament and society to Prime Minister Janez Jansa, who promotes a popular but divisive form of national conservatism. Impacts A successful no-confidence vote in the government followed by early elections would complicate Slovenia’s handling of its EU presidency. The fall of the current government and its replacement by the centre-left would improve Slovenia’s relations with the EU and United States. Hungarian Prime Minister Viktor Orban would lose an ally at EU level if Jansa lost office.


Significance The government's reforms have failed to deliver growth and lower employment as it had hoped. This leaves it poorly placed before December's regional elections and the 2017 presidential poll. Against a background of economic weakness, Europe's migrant crisis is boosting the National Front (FN) and its leader Marine Le Pen. Impacts Sarkozy may beat former Prime Minister Alain Juppe in the main centre-right party primary. Sarkozy may then beat President Francois Hollande in the first presidential round, and Marine Le Pen in the second. Under pressure from the right, the government is unlikely to accept further refugees beyond the proposed EU quota. France's continued economic debility will weaken its voice in the EU, and exacerbate strains with Germany.


Significance These scandals are serious for the government because they reflect poorly on dozens of Conservative MPs as well as Prime Minister Boris Johnson. In addition to undermining the government’s public support, they have also damaged Johnson’s support among party colleagues. Impacts Anger towards the government could grow in poorer regions as tax rises and spending cuts are gradually introduced. The persistence of corruption stories threatens to further damage the United Kingdom’s international reputation. Domestic pressures and ‘Brexit fatigue’ may ultimately prevent London from triggering a trade war with the EU.


Significance Prime Minister Theresa May has committed herself to triggering Article 50 by the end of March 2017. No member state has made use of Article 50 and there is thus much uncertainty about what leaving and, more specifically, triggering Article 50 might involve. Impacts May's timetable could be derailed if the Supreme Court decides that the government cannot invoke Article 50 without parliamentary approval. The EU is likely to maintain its firm stance and refuse to engage in any negotiations before Article 50 is triggered. The continued uncertainty over the terms of Brexit is likely to hit business confidence and could deter investments.


Significance Although former Prime Minister Matteo Renzi is confident of winning, the PD, condemned after the 2013 general election to govern Italy without a majority, has faced growing problems of cohesion and electoral credibility since last December’s referendum defeat. Impacts Local elections in June will indicate electoral sentiment towards the PD and M5S ahead of the general election in early 2018. Continued weak economic performance is fuelling populist sentiment and tying government hands. Tensions with the EU could increase when the government presents its 2018 budget later this year.


Subject Outlook for the Dutch government. Significance The popularity of Prime Minister Mark Rutte’s four-party government has decreased in recent months amid workers’ protests and controversy over parts of its new climate deal. Having lost its majority in both houses, the government will struggle to pass legislation in order to strengthen its track record ahead of the 2021 election unless it compromises with the opposition, which will likely alienate core supporters. Impacts The priority given to social spending will likely mean the Netherlands will not reach the NATO goal of 2% of GDP defence spending by 2025. Climate legislation is now far more likely to be contested and amended in parliament, as it cannot be passed without opposition parties. Rutte’s departure would be an important loss for the EU, given his strong support for EU cooperation and negotiating skills.


Subject Problems facing the Thai government. Significance Thailand’s government, led by a party with ties to the junta that ruled until July, is facing political and economic headwinds as it tries to establish civilian rule. The king is consolidating his authority, political opponents are pushing back on the ruling coalition and exports are weakening, raising quandaries for Prime Minister Prayut Chan-o-cha. Impacts A worsening trade outlook will prompt the government to step up efforts to secure a free trade agreement with the EU. Thailand and the United States will take time to strengthen bilateral ties, nominally mended when Prayut visited Washington in 2017. The army units under the king’s direct control could provide cover for rival factions to Prayut’s in the event of another military coup.


Significance The murder comes at a difficult moment for Prime Minister Boyko Borisov, who has faced mounting media criticism of police and government incompetence, ministers’ resignations and disagreements both within the governing coalition and with President Rumen Radev. Even before Marinova’s murder, attacks on investigative journalists embarrassed the government internationally and highlighted stagnating reform. Impacts Recent incidents with investigative journalists will tarnish Bulgaria’s carefully nurtured image after its EU presidency. Bulgaria's weakened bargaining power within the EU will coincide with heightened tensions in neighbouring Serbia, Kosovo and Macedonia. Lack of meaningful legal reform and suspected collusion between local business and government may accelerate foreign investors’ exodus. Bulgaria is further than ever from escaping EU monitoring on corruption and organised crime.


Subject Outlook for the PJD. Significance The new year has already seen several legal, political, and personal controversies involving the moderate Islamist Justice and Development Party (PJD), currently heading the government. Prime Minister Saadedine El-Othmani is struggling to unite the party and maintain popular support. Impacts There may be a low turnout during the upcoming 2020 elections as Moroccans grow disillusioned by the lack of genuine reform. The Palace’s continued domination of politics and the economy may lead to informal mobilisation, likely in the form of consumer boycotts. Benkirane is unlikely to oppose the party openly to avoid weakening it, though he may become more vocal on the political scene. Morocco’s other Islamist movement, Justice and Spirituality, is unlikely to opt for direct political participation to avoid the PJD’s fate. Given the government’s passive role in policy decisions, international actors will prefer to negotiate directly with the Palace.


Significance The lack of coordination between regions, an inefficient system of testing and tracing and the rapid reopening of society and the economy have contributed to this poor performance. However, the number of deaths has not increased significantly, sparing the healthcare system from the pressure it faced earlier this year. Impacts The disproportionate impact of COVID-19 on Spain's economy will prompt Prime Minister Pedro Sanchez to seek more assistance from the EU. The government can no longer expect parliamentary support from the Republican Left of Catalonia party. Pressures to expand investment in public health care will grow, but resource constraints will limit the government's response.


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