Czech election result will depend on undecided voters

Significance A series of scandals surrounding Prime Minister Andrej Babis, including the newly released Pandora Papers, threaten to undermine ANO’s popularity. A challenge may come from the centre-right SPOLU coalition, campaigning on a strong anti-Babis programme. The key question is which way undecided voters will finally lean. Impacts The Communists, who are currently teetering on the 5% electoral threshold, could eventually disappear from high-level politics. If ANO retains power, the government's European policy will focus on defending Babis’s interests before the EU. Either of the two opposition blocs would pursue a more constructive European policy if they won. Introduction of the euro is unlikely in the foreseeable future, as supporters of the common currency are significantly in the minority.

Significance Prime Minister Theresa May's keynote address had been billed in advance as key to whether she would have the personal political authority to conclude any kind of deal with the EU before the end of this year and see it endorsed by the House of Commons. It was also viewed as a showcase for the support that former Foreign Secretary Boris Johnson might have with Conservative activists as his positions himself for the succession to May. Impacts Although a deal is likely, a high level of drama and market turbulence around the United Kingdom can be expected between now and end-2018. Ambiguity of outcome in the overall EU-UK relationship is likely to persist through 2020. External investment is thus likely to be paused in the short term, with an adverse impact on UK growth.


Significance As many as a dozen lockdown parties are now alleged to have been held at Downing Street, significantly damaging Johnson’s support among the public and his Conservative Party. His position as party leader and prime minister is gravely threatened. Impacts Johnson’s domestic troubles, coupled with rising economic concerns, increase the chance of an agreement with the EU over Northern Ireland. Disillusionment with Johnson, opposition to net-zero and culture wars open the door for Nigel Farage’s Reform Party to revive its appeal. Rising inflation threatens to undermine consumer confidence and slow the economic recovery over the coming year.


Significance He did not name a new prime minister. Over July 25-26, Saied dismissed Prime Minister Hicham Mechichi, dissolved his government, suspended parliament for 30 days, lifted parliamentary immunity and declared himself chief prosecutor, triggering Tunisia’s worst political crisis in a decade. Impacts The Ennahda party could be persecuted once again, this time on corruption charges, as the reconciliation offered excludes its members. Tunisia may become a new ideological battleground, pitting Turkey and Qatar against the United Arab Emirates (UAE), Saudi Arabia and Egypt. The EU, the United States and Algeria have some influence on Tunisia and could perhaps play a moderating role.


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 Government formation should have been relatively straightforward but a series of political controversies have damaged VVD leader and Dutch Prime Minister Mark Rutte’s credibility with the CU and some opposition parties. Impacts The collective rise of the far-right vote means the far right will continue to worry centrist parties and thus influence government policy. Investment in nuclear energy to meet climate targets is unlikely to be a priority for the new government. Dutch influence in the EU could grow with the departure of Merkel in September, and Macron’s focus on the 2022 election.


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.


Subject The package of reforms on a new EU-UK relationship. Significance The agreement between the United Kingdom and its EU partners sets the stage for the UK referendum on EU membership, which Prime Minister David Cameron has set for June 23. Cameron said he had negotiated new terms that would allow the United Kingdom to remain in the EU. Impacts The deal bolsters the campaign to remain in the EU, but the referendum outcome is still highly uncertain. The deal will only come into effect if the outcome is for remaining, forestalling a second referendum for better terms. If the outcome is for leaving, a new relationship with the EU would have to be negotiated during a two-year transition period. It would also probably lead to a second Scottish independence referendum and UK break-up.


Subject The government's preferred timetable for the UK referendum on EU membership. Significance The EU membership referendum will be a major event in both EU and UK political and commercial life. Prime Minister David Cameron's official position is that the poll could take place any time before end-2017. He is less concerned about the likely outcome of the referendum, which he is confident will produce an 'in' result, than about achieving a margin in favour of membership that decisively settles the question and minimises the damage to the Conservative Party arising from the process. Impacts The most likely referendum date is September 15, 2016. This timetable would make the key renegotiation period the first half of 2016, when the sympathetic Dutch government chairs the EU Council. The German government would also prefer the UK referendum to be dealt with relatively quickly.


Significance However, the June 14 local elections resulted overall in the pro-European parties winning 56.5%, with the pro-Russians securing 31.5%. The result will be a relief for the pro-European camp, which had feared that the ongoing banking scandal -- which has seen 1 billion dollars go missing and the resignation on June 12 of Prime Minister Chiril Gaburici -- could portend an upsurge in support for pro-Russian groups. However, despite the pro-European win, Moldova's Gagauz region remains one of Russia's strongest supporters and will remain a potential pressure point. Impacts Russia's enduring prominence in Gagauzia's political landscape will give Moscow a foothold in Moldovan politics. Russia's interest in Moldovan politics will prompt Moldovan supporters of European integration to speed up that process. The EU will have to continue to support Moldova's economy, if only to match Russia's economic support for Gagauzia.


Significance German Chancellor Angela Merkel has said Germany is "ready to offer support" on four Turkish demands in return for cooperating with the EU in the migrant crisis. At a joint press conference in Istanbul yesterday, Turkish Prime Minister Ahmet Davutoglu repeated Ankara's four conditions for implementing an action plan against the influx of Syrian refugees into Europe. It wants more EU aid for those refugees inside Turkey; three chapters opened in Turkey's EU accession negotiations; visa liberalisation for Turks travelling to the EU; and a seat for Turkey at EU summits. Impacts Erdogan's resentment over EU condemnations of growing authoritarianism is so deep that any EU softening will have little impact. Davutoglu and Erdogan present Turkey as so important globally, that the EU is desperate that it join; they have no interest in accession. Several EU member states have severe reservations about visa liberalisation, funding aid and opening new accession chapters.


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