UK prime minister will likely remain in power for now

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.

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 Although a victory in the short term for Abbott, the narrow margin will only intensify doubts about his long-term prospects as party leader and as prime minister. The challenge continues a trend of instability across Australia's main political parties. The country is poised to enter a record 25th year of uninterrupted economic growth, yet has changed prime minister four times since 2007. Impacts Australia will remain one of the most robust developed economies throughout 2015, with growth rates far above those of the EU. The Reserve Bank's decision to cut interest rates indicates that there are worries of the impact of the China-induced mining slowdown. Concerns in state capitals about housing bubbles will grow and may be an issue in the next federal election.


Subject A profile of Shigeru Ishiba. Significance Ishiba was runner-up to Abe in the 2012 leadership contest for the Liberal Democratic Party (LDP) and since then has positioned himself to replace Abe as party leader and prime minister should Abe's popularity falter. A poll last month showed that 20.4% of the public wanted Ishiba as prime minister compared with Abe's 19.7%, a dramatic swing since December, when Abe had 34.5% and Ishiba just 10.9%. Impacts Security policy is Ishiba's strength; he has well-developed views and a good sense of what is realistic. Ishiba's critique of Abenomics is lucid, but he has yet to offer a clear alternative. Washington would likely welcome an Ishiba government since he has good connections in the US defence establishment. Ishiba's Christianity may also win him points in Washington.


Subject Brexit outlook. Significance If Prime Minister Theresa May can get the Withdrawal Agreement (WA) and Political Declaration on future relations approved in Parliament this week, the United Kingdom should leave the EU on May 22. However, it remains unlikely that her deal will gain a parliamentary majority, setting up a different deadline. The United Kingdom must come up with an alternative plan by April 12 or face the prospect of crashing out of the EU with no deal. Impacts The United Kingdom could have a new prime minister within weeks; a general election cannot be ruled out. The EU will remain distracted by Brexit as it heads into a season of political change beginning with European Parliament elections in May. As a final option, May could commit to resigning to get support for the WA from Conservative Party MPs.


Significance The bill establishes a new statutory regime for goods and services trade within the United Kingdom, which is essential for signing trade agreements. However, it also contains clauses on the Northern Ireland Protocol which threaten to override the legally binding EU-UK Withdrawal Agreement (WA), while giving London new powers over the devolved administrations, including on state aid. Impacts The EU is unlikely to collapse the trade talks with the United Kingdom. An EU-UK deal is still possible because the alternative would seriously threaten Prime Minister Boris Johnson’s political survival. The new bill, on top of COVID-19, will give the opposition Labour Party an opportunity to overtake the Conservatives in the polls.


Significance They are intended to set the framework for the future economic relationship between the United Kingdom and the EU. However, they have become a source of deep political division and mistrust, exacerbating concerns about the future of their political and economic relationship. Impacts A further deterioration in UK-EU trade relations would threaten to undermine peace and stability in Northern Ireland. Negative trade news is unlikely to shift opinions significantly on Brexit or support for Prime Minister Boris Johnson. UK hostility towards defence and security cooperation underpinned by EU institutional arrangements will remain strong.


Significance The summit represented an opportunity for UK Prime Minister Theresa May to discuss her Brexit plans directly with other heads of state and government rather than doing so via the European Commission’s Article 50 task force. Impacts The negative mood music from the Salzburg summit is weakening May’s position in her Conservative Party. The poor personal relationship between May and her Irish counterpart Leo Varadkar is complicating discussions on the Irish border. The unity of the EU27 could crumble once trade negotiations bring their divergent interests to the fore. The EU is maintaining its insistence that there can be no ‘hybrid model’ between Norway and Canada.


Significance This comes as US foreign policy, especially towards China and Iran, is forcing some political tightrope-walking for US partners. It also comes as UK Prime Minister Theresa May prepares to resign as Conservative Party leader on June 7; her party will from June 11 pick a successor who will become prime minister. Impacts A ‘no-deal’ Brexit would allow London to strike independent trade deals; Trump’s team is ready for talks. The next Conservative leader may well be pro-Brexit, potentially making a no-deal exit more likely. Both countries will emphasise security and defence ties to counter claims of diminished UK utility to Washington post-Brexit. London will likely seek a middle course in UK-China ties since it also eyes a UK-China trade deal. London may try to discourage Trump from using tariffs, but is unlikely to persuade him.


Subject New UK government agenda. Significance Prime Minister Boris Johnson’s Conservative Party won a substantial majority in the December 12 election by winning dozens of seats that traditionally had been Labour Party strongholds. While Brexit played a crucial role in appealing to first-time Conservative voters, Johnson plans significant investment beyond south-east England to boost the Conservatives’ credentials in the ‘left-behind’ regions of the United Kingdom. Impacts There will be little opposition within the Conservative Party to public-sector reforms designed to improve delivery. The legally binding pledge to leave the EU by December 2020 would increase the chances of a limited EU-UK free trade deal, at best. Poor election results for the DUP and Sinn Fein increase pressure on both parties to revive Northern Ireland's devolved government.


Subject Politics after Bulgaria's local elections. Significance Prime Minister Boyko Borisov's centre-right Citizens for Bulgaria's European Development (GERB) now has mayors in 22 out of 28 regional centres, while the Socialist Party (BSP), its main opposition rival, ended up without any for the first time since 1990. However, only one-third of local councils nationwide will be controlled by GERB, forcing it to negotiate coalitions in the three biggest cities -- Sofia, Plovdiv and Varna. This mostly signifies the rising importance of non-party electoral blocs that are coalescing around prominent local businesses. Impacts Real GDP growth of 2.9% year-on-year in the third quarter, boosted by EU funds, will flatter GERB management of the economy. Pressure on the budget is likely to increase, Borisov repeatedly showing himself open to lobbying from interest groups, such as the police. Bulgaria will continue to follow Germany's lead in the EU, hoping for smooth delivery of EU funding in return. The tough line on migrants will continue; the public solidly backs a government that has largely dissuaded use of the Bulgarian route.


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