Wednesday, 6 April 2016

That Dutch referendum

The Dutch referendum is advisory only. It isn't binding and the Ukraine association agreement is already in motion. The Dutch parliament has already ratified the EU agreement. Important parts of the EU-Ukraine Association Agreement were provisionally applied as of 1 November 2014.

Since 1 January 2016 also the Title IV of the Association Agreement (which establishes a Deep and Comprehensive Free Trade Area (DCFTA) is provisionally applied. In order to maintain its support for Ukrainian exporters, the EU will extend its autonomous trade measures up to the same date.

Commercial trade deals have already taken place within the DCFTA framework and nothing is likely to stop it now. This result of the referendum will likely have zero impact on Ukraine. Options include leaving the agreement in force provisionally in perpetuity, or drafting exemption clauses for the Netherlands. Nothing will happen in a hurry, not least to avoid giving any succour to the UK Leave campaign.

In any case it is more an anti-government sentiment and not that much to do with Ukraine as far as domestic sentiment goes. Reuters has it that the result exposes dissatisfaction with the Dutch government and policy-making in Brussels - signalling a anti-establishment mood.

There could also be far-reaching consequences for the fragile Dutch coalition government, which currently holds the rotating EU presidency and has lost popularity amid a wave of anti-immigrant sentiment.

Eurosceptics will pile in and claim it as a moral victory, and puts the EU in the position of having to explain it away. What a pity. Then on the other hand, the Remainers will be saying "it's a great victory for Putin" which is self-evidently dumb.

What it does mean is there will be a peripheral debate about Ukraine and the circumstances leading up to the Russian invasion of Crimea which, though interesting, will have zero impact on the polls. It is mainly a topic of interest to the chattering classes. The media calls the association agreement a "trade deal" thus robbing it of its true significance. After two days of pointless bickering, the debate will have moved on to chase the next parked car.

It's very bad PR for all concerned though, and the message will have ripples. If anything does sink it will be that there has been a vote that is something to do with the EU and the EU ignored the outcome. It probably won't even pretend to do anything about it - and while that should have an effect - it won't. Brits are as parochial now as they have been for all of time.

What will be interesting is whether anyone challenges the legitimacy of the result on the basis of low turnout. It is estimated to be only marginally lower than that of the Dutch 2014 euro elections (37.32%). It's fair to say the EU is suffering from a major crisis of confidence even if the UK votes to remain.

At best we can say this is a distraction that may breathe a little life into the debate but nobody really cares about Ukraine or Greece to any large extent, and ultimately, winning still depends on reassuring business and the public that trade and jobs will be unaffected. By that measure, the leave campaign is manifestly failing because it has no direction and no credible plan. 

That means we have some serious work to do in identifying all the trade journals online, seeking out mid-level industry voices and making sure they at least know there is a comprehensive Brexit plan, one likely to be followed by our own government, and one that focusses on maximum single market continuity.  

That will be an intensive Twitter operation. The cyber equivalent of delivering leaflets. Unless we can reassure and incentivise the business community and the wider public we simply cannot win. In this, we cannot allow ourselves to be distracted by red herrings like the referendum today. It isn't a winning ticket any more than the pretence that voters might save a few quid here or there. 

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