In the wake of the stunning Brexit vote come news that French president Francois Hollande has called for a meeting of minds to discuss a response.
Interesting, the group includes Eurosceptic party leader Marine Le Pen.
Please consider François Hollande Meets Marine Le Pen to Discuss Brexit Fallout.
François Hollande met Marine Le Pen at the Elysée Palace on Saturday in a sign of how the far-right leader has taken centre stage in France in the wake of Britain’s vote to leave the EU.
Mr Hollande gathered France’s most prominent political party leaders — including Ms Pen — for a series of back-to-back meetings as he sought to thrash out a response to Thursday’s UK referendum.
The move comes less than a year before France’s presidential election, in which both Mr Hollande and Ms Le Pen are expected to run. The French president was also meeting Nicolas Sarkozy, his predecessor in the Elysee and another likely candidate in next year’s race.
Britain’s decision to leave the EU has further raised the profile of Ms Le Pen, whose National Front has already notched up a series of impressive results in local elections.
Ms Le Pen used Saturday’s meeting to reiterate her demands for a referendum on France’s membership of the EU, but she said that her calls were rejected and admitted that she was left “with the feeling of having come for nothing”.
She added that there was a clear strategy to make Britain’s exit painful so as to set an example to others. “It is clear that some people want the divorce to be as painful as possible so that others don’t get the idea of going down the same road as the British,” she said after the meeting with Mr Hollande.
The French president is seeking to adopt a tough stance on the UK’s decision — one that would impose costs on Britain for leaving the bloc — not least to limit Ms Le Pen’s calls for a so-called “Frexit”, and to avoid the issue dominating the forthcoming campaign.
On Saturday, Emmanuel Macron, the French economy minister, called for a new European project to make the bloc “much more transparent and democratic”, and said that it should be put to citizens via a referendum. “We have never had the courage to organise a real European referendum,” he said at Paris’s Sciences Po university conference. “This next project has to give it the strength.”
Mr Macron took a hard line on Britain’s decision to leave the EU, insisting that it was “the failure of the British government”. He added: “if we [the rest of Europe] have failed, it was to have allowed a member to take the European project hostage in a unilateral way.”
There were jubilant scenes in the National Front headquarters on Friday, and its leaders appeared emboldened by the result across the Channel. Florian Philippot, FN’s vice-president, told reporters that Britain’s decision would force the same question on French voters. “We cannot escape a referendum [in France],” he said.
Mr Philippot, who is strongly associated with Ms Le Pen’s attempts to recast the party that her father founded in 1972 as a legitimate, mainstream party for the 21st century, added: “It shows the French people, first, that a referendum on the EU is possible — and in a country that has an equivalent size to France. And it shows that you can leave. That is considerable progress in political terms.”
Le Pen the Big Winner
Le Pen was the big winner in this meeting. Being invited to formulate a response gives her upgraded legitimacy.
I had to read this sentence twice “It is clear that some people want the divorce to be as painful as possible so that others don’t get the idea of going down the same road as the British,” said Le Pen.
When I first read it, I thought she proposed strong penalties. That would be wildly inconsistent with her call for a French referendum. On reading the sentence a second time, she was referring to others wanting a severe penalty, not herself.
Failure of Government
Macron notes the “failure of government”. In doing so he sounds like Jean-Claude Juncker. Apparently only pro-EU voices can be heard.
Can France escape a referendum?
Le Pen’s National Front leadership effectively says “non, non, non, et non”.
Amusingly, Macron calls for a “Real European Referendum“.
By all means, let’s have a go at it.
I propose starting with this simple statement: “Effective immediately, all tariffs and subsidies are set to zero.”
The entire body of the treaty should fit on a page or two.
Mike “Mish” Shedlock.
Hey, was Schauble on speaker phone? He’s the man with a plan these days. The plan is to double down with punishment for Brittain just as she describes. You vill remain in ze EU oonst you vill like it. Or else!
No velvet divorce for Britain?
Schauble has been warning Merkel not to get so close to the EU…. if anything, he is laughing at Merkel now.
Don’t be so sure. He’s the man with the plan:
https://global.handelsblatt.com/edition/457/ressort/politics/article/schaubles-secret-brexit-plan
The man with a plan to push Merkel out the door (and return Germany to self rule)…. Schauble knows the EU is bad news for Germany, and has said so many times.
Only thing that stopped him from pushing Merkel in front of a train earlier was that younger CDU leaders are not ready (and AfP crazies are). Schauble knows he is not a spring chicken, and it will take time to groom Merkel’s replacement.
Merkel’s stupid stance on immigration is Schauble’s biggest worry; the EU will fail soon enough.
And how are these Eurothugs going to enforce their punishments, LOL? Britain is the strongest economy in the area, has a functioning military, and has nukes…..
Nobody wants to talk about this as its an embarrassment , and proves the lack of leadership macros continental Europe . The only other country with a trained army is France , the others are rubbish .
Macron?
So that is the French word for Moron.
https://kellidgordonlibertyblog.files.wordpress.com/2015/03/grumpy-cat-doesnt-need-a-dictator-hes-got-the-constitution-and-a-firing-squad.jpg
Even the diehard libtards in France must be getting damn tired of having their nation overrun by indigent Muslims refugees and terrorists. Brexit may well have been the catalyst to convince the average Frenchman to save his country from the ravages of globalism and rulers seated in Belgium.
In my lifetime I’ve seen few, if any, sensible decisions made by the government or the voters in France. But a Frexit may be on the horizon. Miracles do happen. After Brexit never say ‘never’.
“Pour encouraged les autres”
An action carried out in order to compel others to obey or submit
Of course, much less feasible when the proposed victim has nuclear weapons and other major trading partners….
Classic French move…. “Pour encourager les autres”
An action carried out in order to compel others to obey or submit
If the EU had bothered to get popular support in the first place (the treaties were rejected in two country referendums, and not even submitted to votes anywhere else) — they wouldn’t be in this situation.
EU has zero democratic legitimacy. Asking for permission to steal after you already robbed the bank is kind of backwards.
Last I heard, France had a lot of unsold agriculture (fruit, etc) that their government won’t let them sell to Russia. Now they are going to cut off their biggest export market for summer fruit (aka England)? It will take England about 15 minutes to source fruit from South America instead.
France isn’t about to start a trade war with England (nor will Spain). The EU can throw as big a temper tantrum as they want, but Hollande’s government won’t last 24 hours if the farmers and government unions both want him out. Hollande is in big trouble already, he can’t antagonize French farmers on top of everything else.
And Le Pen knows this.
Rajoy may be getting his termination papers later today. Whether Rajoy or a fragile new coalition, Spain isn’t going to start a trade war and damage their farms either.
With two large EU members (for now) both over a barrel, the EU has no choice but to lick their wounds and diplomatically ask England for a trade agreement much like what the EU already has with Switzerland.
There will be temper tantrums this weekend and next week, but ultimately (medium and long term) the EU really has no alternatives. Short term, everyone in Europe goes on vacation in mid July through September 1st.
Le Pen is hoping to set herself up to take power from Hollande in the fall — but whichever lunatic is in Paris (Le Pen or Hollande) will have to play nice with England or else don’t bother unpacking boxes
Like! +2
Better put than I could with my limited English skills. +1
Brits are a catalyst for change, the ball is now rolling. I thought Americans would have been the role model in 2008-09 but the blank soft catatonic stare of our citizenry rolled over easily, opened their pocket books, and bought the world will end story. Brits traveling abroad will be treated with great respect, we will want to become like them, Trump now has the wind at his back. let us flush the political US toilet and return to transparency.
Why is Trump always the imagined savior? I predict that within 6 months of his inauguration all of you will be calling for his impeachment. I have to laugh when you think Trump is going to bring transparency to the US government. His election will make me a multi-millionaire when my bet on gold and the miners pays off so I’ll be laughing all the way to the bank. Not to mention living in Punta del Este, Uruguay.
Could be, but when the alternative is Hillary, who might get to name 3 new Justices from her circle of Marxist clowns, Trump is inevitable for anyone with any brain cells left….
I seem to remember the Brits helping out during WW2. A lot of good men and woman died helping Europe out. But that was last century so let’s just kick punish them now.
A nice touch from the EU.
That is a surprise no more for me. Living on the continent I have had to deal with a lot of bad attitude as British… not that I ever expected any sort of thanks in any way, but there is a level of disrespect underway that completely tramples older recognitions ( mutual recognitions). I have to say this as a form of warning really, a lot of Europe has moved on or is outside of the traditional understandings, don’t underestimate it, and don’t be caught out by it as it is beyond fair reason – I guarantee you it is no fun to enter on a certain understanding, and then to be subject to something other.
Doesn’t mean there aren’t good people in all countries, but the base mood has changed.
Yes, eliminate all tariffs would be a nice simple, workable treaty. Unfortunately, ivory tower economists talked the EU into trying inefficient bank central planning. The experiment did not work out Now Europe is spiraling toward a banana republic, bankers are demanding endless bailouts, and there are millions of refugees fleeing bank food inflation in the Mid East.
Like
War reparations, sanctions on Russia, punishment of Brits… Same arrogant pattern time and again. Apparently ostriches never learn…
EU cannot survive without Britain. EU will restructure to accommodate Britain. Britain will have a second referendum on whether to accept an invitation into the restructured EU. If the new EU does not satisfy Britain then it won’t satisfy France, Netherlands, Italy, Spain, et.al. They all chuck it in, default on sovereign Euro debt, and breath a sigh of relief. Free at last! Free at last. Thank God free at last. Germans can take their EU Germanicly regulated cucumber and stick it. That’s my Rosy Scenario.
If the cohesion of the EU is now by economic threat of its unelected rulers, then by all means get out!!! Don’t be a victim or enabler.
Nothing has “changed.” The rule is “no border changes in the borders in the Ostlands” and Poopie Pants Putin rolls into Crimea and every Nation State in Europe says the same thing:. “we want our land back too.”
You’d think sixty million dead would clue people in…nay, verrily…”President Obama comes roaring in singing Pink Floyd music.”
So you can ditch all your econo bs … this is War.
In other words the “EU” isn’t going anywhere. Currently there are three “areas of operations” … France in North Africa, Great Britain in the Eastern Med/Cyprus and Germany/Poland/Romania/US in Ukraine/Southern Russia.
Whatever “constitution” the EU takes going forward there is no changing this reality.
I’ve been laughing for months now on folks saying “long Russian Ruble” because the old saying “that stock trades low for a reason” absolutely applies to currencies too.
Panics are the exact same thing as manias in that in the latter liquidity is taken as “infinity” whereas in the former “the question is is it zero?”
Either way every one is rushing to buy DOLLARS not gold. And what surges next… no NOT GOLD BUT TREASUURIES because once everyone has established their dollar positions they need to issue DEBT…in DOLARES…which means BUY TREASURIES.
If you’re on Wall Street you want to SELL DOLLARS AND ESTABLISH SHORT POSITIONS IN TREASURIES as the Fed and Federal Government ARE IN FACT PROVIDING INFINITY DOLLARS AND TREASURIES.
(Insert Google search Rimpac 2016 here)
Will the Euro hit parity to the dollar on Monday…sure sounds likely to me.
Solution? I’d put the entire country of Greece in some form of “protective custody” to make sure…cough, cough…”there’s no gambling going on here” cough, cough.
Mish had a post yesterday about the alleged problems at Deutche Bank… A EUR 42 trillion ***NOTIONAL*** derivatives book that has an actual risk exposure around EUR20-40 billion — which is to say about 1/3rd or 1/2 the damage RBS did to the British Treasury. It would be painful (if it happened), but its not something that would take down the German government / taxpayer.
Mish wanted to focus on the stock price, which to me seemed very CNBC Jim Cramer-ish. But the more I looked at it — you have to ignore panic sessions like Friday (where everyone dumps every stock without any thought at all).
The rest of DB’s declining stock price correlates really well with declining carry trade. If you don’t have the right data, you can approximate the situation by using the yield spread between 10y Bunds and 3m Euribor.
As Deutche Bank management has pointed out many times — Mario Draghi’s monetary stupidity is destroying Europe’s ability to finance anything, not to mention destroying the savings of millions of pensioners.
While Deutche Bank has a yield carry problem (rather a LACK of yield carry problem) — it is arguably the best of a bad lot.
Credit Agricole in France more bad loans and the same lack of carry problem.
Unicredito in Italy — bad loans and lack of carry.
German landesbanks (each of which are ‘small’, but add up to a lot in aggregate) have a big carry problem plus mortgage loans to Polish borrowers (how many Polish Klotzys will it take to buy a new D-mark when they get issued?).
Spain’s Banco Santander has some heartburn in Brazil at the moment, plus carry spread problems and a failing government in Madrid.
Draghi’s monetary policy is an existential threat to ***ALL*** the post-Brexit EU banks, not just Deutche.
The idea that BNP and Credit Agricole haven’t forcibly beaten this information into Hollande’s head is implausible. Sarkozy and Le Pen seem content to let Hollande drown on his own.
RBS has plenty of issues to contend with, but the British 10y-3m spread is still quite positive and quite viable. EU fascists can scream “sacre bleu!!” all they want, but they have boxed themselves into a really bad corner.
(an EU/UK trade war would hurt France and Spain more than England, see my earlier comment)
Excellent analysis, Greg.
“It is clear that some people want the divorce to be as painful as possible so that others don’t get the idea of going down the same road as the British,” she said after the meeting with Mr Hollande.
Government attacking the people.