Political uprising in Spain shatters illusion of eurozone recovery

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Telegraph

Political uprising in Spain shatters illusion of eurozone recovery

"Our message to Europe is clear. Spain will never again be the periphery of Germany. We will restore the meaning of sovereignty," said Podemos


 






 

Podemos leader Pablo Iglesias  Photo: Reuters

 







 




http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/

By Ambrose Evans-Pritchard

8:10PM GMT 21 Dec 2015

 


Comments 649 Comments

 




Spain risks months of political paralysis and a corrosive showdown with Germany over fiscal austerity after insurgent movements smashed the traditional two-party system, leaving the country almost ungovernable.


The electoral earthquake over the weekend in one of the eurozone’s ‘big four’ states has echoes of the shock upsets in Greece and Portugal this year, a reminder that the delayed political fuse from years of economic depression and mass unemployment can detonate even once the worst seems to be over.


•  There's no easy way out of Spain's insurmountable economic mess


Bank stocks plummeted on the Madrid bourse as startled investors awoke to the possibility of a Left-wing coalition that included the ultra-radical Podemos party, which won 20.7pc of the votes with threats to overturn the government’s bank bail-out and to restructure financial debt.


Pablo Iglesias, the pony-tailed leader of the Podemos rebellion, warned Brussels, Berlin, and Frankfurt that Spain was retaking control over its own destiny after years of kowtowing to eurozone demands.


“Our message to Europe is clear. Spain will never again be the periphery of Germany. We will strive to restore the meaning of the word sovereignty to our country,” he said.

 

The risk spread on Spanish 10-year bonds jumped eight basis points to 123 over German Bunds, though there is no imminent danger of a fresh debt crisis as long as the European Central Bank is buying Spanish bonds under quantitative easing. The IBEX index of equities slid 2.5pc, with Banco Popular and Caixabank both off 7pc.

Premier Mariano Rajoy has lost his absolute majority in the Cortes. Support for the conservative Partido Popular crashed from 44pc to 29pc, costing Mr Rajoy 5m votes as a festering corruption scandal took its toll.

The electorate punished the two mainstream parties that have dominated Spanish politics since the end of the Franco dictatorship in the 1970s, and which by turns became the reluctant enforcers of eurozone austerity.

•  Europe braced for a revolutionary Leftist backlash after Greece

The Socialists (PSOE) averted electoral collapse but have lost their hegemony over the Left and risk being outflanked and ultimately destroyed by Podemos, just as Syriza annihilated the once-dominant PASOK party in Greece.

It had been widely assumed that Mr Rajoy would have enough seats to form a coalition with the free-market and anti-corruption party Ciudadanos, but this new reform movement stalled in the closing weeks of the campaign.

 

“There is enormous austerity fatigue and the country as a whole has clearly shifted to the Left,” said sovereign bond strategist Nicholas Spiro. Yet the Left has not won enough votes either to form a clear government.

“The issue now is whether Spain is governable. All the parties are at daggers drawn and this could drag on for weeks. I don’t see any sustainable solution. We can certainly forget about reform,” he said.

Mr Spiro said Spain has already seen a “dramatic deterioration” in the underlying public finances over the last eighteen months, although this has been disguised by a cyclical rebound, the stimulus of cheap oil and a weak euro, and QE from Frankfurt. “They have simply gone for growth,” he said.

Yvan Mamalet from Societe Generale said Spain’s potential growth rate has fallen to 1pc, from over 3pc before the crisis, a sign of how much damage has been done by the ‘hysteresis’ effects of long-term unemployment and lack of investment.

•  A new disease is spreading across Europe: hysteresis 

 

Public debt has jumped to 100pc of GDP and is nearing the safe limit for a country in a currency union with no sovereign central bank. “Spain now has very limited fiscal space and any external shock could push debt towards less sustainable levels, above 130pc,” he said.

Spain has been held up as the poster-child of austerity and reform in southern Europe. But while it is true that growth has rebounded, output is still 5pc below its previous peak. The deeper pathologies and imbalances of the pre-crisis era are still there.

The International Monetary Fund says the “structural deficit” has risen from 1.8pc of GDP last year to 2.5pc this year. This is courting fate given that Spain’s net international investment position (NIIP) is minus 90pc of GDP, far beyond the 30pc safety limit. “Deep structural problems remain and vulnerabilities persist,” it said.

 

The IMF warned that Spain still needs radical reform of the labour laws to raise low productivity levels and move up the value-chain, and cited “reversal of past reforms” as the key risk. That is exactly what may now happen.

•  Spanish growth miracle an illusion, warns ex-IMF chief Blanchard

If a Socialist-Podemos coalition takes charge at the head of a Left alliance, it will not be singing the IMF tune.

It would also be foreign policy disaster for German Chancellor Angela Merkel, who has already lost Italy, Greece, and Portugal to the Left, and faces the growing risk of anti-austerity 'Latin bloc' led by the Socialists in France.

A swing to the Left in Spain would change the balance of power in the European Council and spell the end of Mrs Merkel's control over the EMU policy machinery.

Mr Iglesias has toned down his hard-line views, trying to strike a tone of authority in foreign affairs and economics. “When you want to be leader of your country, you have to be credible,” he said.

 

The party has dropped its call for the seizure of telecommunications, transport, the banks, energy companies, and the commanding heights of the economy, limiting nationalisation to “exceptional” circumstances.

It no longer demands restructuring of the country’s €1.1 trillion public debt, opting instead for an audit to determine which parts of the bank bail-out debt is odious and should be repudiated. It still wants a 35-hour week, but now accepts that the retirement age must rise to 65. Plans to leave NATO have been shelved.

Yet Podemos, a child of the ‘Indignados’ revolt against austerity, is led by young university professors steeped in the theories of Italy’s former Communist guru Antonio Gramsci. They have learned a lesson watching Syriza make blunders in Greece, but they are no less radical.

Simon Tilford from the Centre for European Reform said Spain is  not out of the woods and the eurozone’s elites are “mistaking a modest cyclical upturn for something more profound”.

 

There has been an export miracle of sorts, led by a surge in car output as multinational companies switch plant from France to Spain to take advantage of wage cuts, reaching 27pc for new workers at plants in Valladolid.

But what has really eliminated the current account deficit is a 12pc collapse in internal demand. Imports have been choked. The country can barely balance its external books with unemployment at 22pc. A full recovery would quickly expose Spain's chronic lack of competitiveness within the euro structure.

Mr Tilford warns that the country will enter the next global downturn with its economic defences largely exhausted and few tools left to fight recession, and above all with populist parties already gaining a deep foothold. The political shock over the weekend is the first thunderclap.

Telegraph


Spain’s ruling conservatives win election but lose grip on majority

Popular Party (PP) of Prime Minister Mariano Rajoy faces battle to cling to power as result heralds end of bi-party politics


 






Spain's Prime Minister and Popular Party (PP) candidate Mariano Rajoy reacts at the party headquarters after results were announced in Spain's general election

Spain's Prime Minister and Popular Party (PP) candidate Mariano Rajoy reacts at the party headquarters after results were announced in Spain's general election  Photo: REUTERS

 







 




By James Badcock in Madrid

7:18AM GMT 21 Dec 2015

 




Spain was plunged into political instability on Monday after voters frustrated with corruption and economic woes dealt a crippling blow to the ruling conservative party, opening the way for deadlock over the formation of a new government.


The country now faces a leadership void and the possibility of a fresh election in the spring after the Popular Party of Prime Minister Mariano Rajoy was reduced to just 123 seats in the 350-strong Congress, far short of the 176 it needs for a majority. The two traditional parties of government both suffered their worst results in decades as voters turned in droves to new grassroots movements amid a series of corruption scandals which have rocked the political establishment.


The PP was punished by an electorate worn down by spending cutbacks and allegations of murky financial dealings, in particular a judicial investigation into the former party treasurer, Luis Bárcenas, who has been accused of keeping tens of millions of euros in secret Swiss accounts. Although the PP still ran out a winner with 29 per cent of the total vote, it was the conservatives’ worst result for over 25 years.


The other establishment party, the socialist PSOE, just held on to second place with 22 per cent of the vote, and 90 seats. Meanwhile two newcomers - the anti-austerity Podemos (We Can) and the centrist Ciudadanos (Citizens) - took 21 per cent and 14 per cent of the vote respectively, shattering the two-party domination that has reigned since the end of the Spanish military dictatorship in 1975.

 



 


 


 


But while the public disaffection with the political elite is clear, it remains less than obvious who will govern Spain for the next four years, especially after the PSOE said it would vote against another term for Mr Rajoy’s government.

As the possibility of a minority PP government appeared to sink, Pedro Sánchez, the PSOE leader, declared that “Spain wants change, Spain wants the Left”.

Podemos (We Can) party leader Pablo Iglesias (2nd R) reacts with party members after results were announced in Spain's general election in MadridPodemos (We Can) party leader Pablo Iglesias (2nd R) reacts with party members after results were announced in Spain's general election in Madrid  Photo: REUTERS

The PP's most natural ally,  Ciudadanos, which took 40 seats, on Monday ruled out joining any government, insisting it would stay in opposition. But Albert Rivera, the party's leader, warned against a complicated Left-wing “coalition of losers” should PSOE link up with Left-wing Podemos, which along with regional allies won 69 seats.

"Spain cannot allow itself to be Greece, Spain cannot allow itself to be a chaotic country," he told Telecinco TV on Monday.

Centre-right party Ciudadanos leader and candidate for the general election, Albert Rivera (C) speaks at a hotel after the results of Spain's general electionCentre-right party Ciudadanos leader and candidate for the general election, Albert Rivera (C) speaks at a hotel after the results of Spain's general election  Photo: AFP

Even if Mr Sánchez and Pablo Iglesias, the leader of Podemos, were to reach an agreement they would still need to cobble together support from Basque and Catalan nationalists from both sides of the political spectrum to secure a 176-seat majority in Congress.

Those difficulties did not stop Mr Iglesias, the pony-tailed politics lecturer who formed Podemos less than two years ago, laying out conditions for a pact and threatening to hold out for a fresh election in the spring if no deal was forthcoming.

Supporters of Podemos party follow the partial results of the Spain's general elections in MadridSupporters of Podemos party follow the partial results of the Spain's general elections in Madrid  Photo: AFP

“We have no doubt that if Spain votes again, the forces of change will consolidate their gains," he said.

The advent of a coalition featuring Podemos could have major implications for Catalonia's independence struggle, with the party advocating a self-determination referendum in the northern powerhouse region.

A People's Party (Partido Popular) supporter waits for the results during the Spanish general election outside the party's headquarters in MadridA People's Party (Partido Popular) supporter waits for the results during the Spanish general election outside the party's headquarters in Madrid  Photo: Bloomberg

The political uncertainty was not received well by the financial markets, with ratings agency Moody's saying it could put the brakes on a long-awaited rating upgrade. Spain's recovery from years of economic crisis remains fragile, with unemployment persisting at 21 per cent.

One senior PP official, Fernando Martinez-Maillo, told Cadena Ser radio: "I am asking everyone to show responsibility, because the stability of Spain is at stake, progress in the economic recovery is at stake."

Telegraph

Spain's stock market tumbles on political instability


The country's main index loses as much as 3pc after an inconclusive election sees voters shift allegiance to smaller parties


 






The Spanish (R) and

The Spanish (R) and "Senyera" Catalan flags fly near to the Palau de la Generalitat, the Catalan regional government headquarters, in Barcelona   Photo: AFP 

 







 




http://www.telegraph.co.uk/journalists/

By John Ficenec

11:45AM GMT 21 Dec 2015

 


Comments 3 Comments

 




Spanish stock markets tumbled and government bonds were sold off after inconclusive elections over the weekend saw disaffected voters favour smaller parties at the expense of the country's two dominant groups, throwing the country into weeks of instability and political uncertainty.


The IBEX index of leading Spanish companies dropped by 3pc at the stock market open to a low of 9,412.5 points, before recovering to trade around 9,555 in Madrid.

 



The performance in the Spanish markets was in sharp contrast to other European indices, all of which reported gains, despite the oil price slumping to an 11-year low.


Fears also spread to holders of Spanish government debt, as the yield on ten-year bonds moved 5.6pc higher to 1.78pc. However, this is still far below the 5pc level that Spain had to pay on its debts as recently as 2013.


 


Spain's Prime Minister Mariano Rajoy lost his majority in an election on Sunday which left no clear winner, but saw voters reward two new parties - the anti-austerity Podemos and liberal-minded Ciudadanos - at the expense of the two main incumbents, the conservative Popular Party and the Socialists.

Mr Rajoy’s People’s Party lost a third of its lawmakers, but still managed to beat the Socialists to take the most votes and earn the first shot at forming a government.

Investors are concerned that the success of Podemos and Ciudadanos, who between them took 109 seats in the 350-member parliament, will lead to weeks of political wrangling.

Left-wing Podemos' popularity has surged from almost nothing, allowing it to secure 20.7pc of the vote, while the Socialists won 22pc and the ruling Popular Party had 28.7pc. Market-friendly Ciudadanos, or citizens, came fourth place with about 14pc of the votes cast.

Telegraph


Ministers will be allowed to campaign for Brexit, claims Downing Street source

Senior Conservative figures are reportedly said to have reassured Eurosceptics in the Cabinet that they will not be called on to resign


 






George Osborne, the Chancellor, has been put in charge of negotiations with the EU

George Osborne, the Chancellor, has been put in charge of negotiations with the EU   Photo: Julian Simmonds/The Telegraph

 







 




By Laura Hughes, Political Correspondent

9:33AM GMT 24 Dec 2015

 




George Osborne has reportedly advised the Prime Minister to allow Cabinet members to campaign to  leave the EU in the upcoming referendum, to prevent a split in the party.


Senior Conservative figures are also said to have reassured Eurosceptics in the Cabinet that they will not be called on to resign should they decide to campaign for Britain to leave the European Union, according to a Downing Street source.


The intervention comes as Lord Heseltine warned David Cameron he would become a " laughing stock across the world " if he allowed his own ministers to campaign for Brexit.


  Photo: EPA/OLIVIER HOSLET


Lord Lawson, the Eurosceptic peer has said it would be "sensible"  for the prime minister to allow his Cabinet to speak out on both sides of the debate.

A senior Conservative told The Times: “[Mr Cameron] knows that collective responsibility on this issue is fiction.


"Muzzling ministers is not the way to create an open debate. Downing Street has started its campaign to stay in already.”

Lord LawsonLord Lawson, the former Chancellor, is chairman of the accounting sub-committee of the Commission on Banking Standards   Photo: ANDREW CROWLEY

The Conservative Party has pledged to stay neutral in the lead-up to the referendum, which David Cameron has indicated will be held next year.

Graham Brady, chairman of the Tory backbench 1922 committee, said: “It is essential that ministers should be given the freedom to vote and speak in accordance with their conscience in what is a vital matter of national interest, and something on which so many Conservatives have stated positions of deep conviction and principle.

"Allowing freedom of conscience will make it easier to bring the party together again after the referendum.”

Graham BradyGraham Brady  Photo: PA

Last night a Downing Street source said that no decisions had yet been been reached.

They said:“The prime minister has been absolutely clear on this issue. Collective responsibility applies during the renegotiation.

“Decisions on what happens after a deal has been struck will be made once that deal has been finalised.”

Earlier this week the Daily Telegraph revealed Lord Feldman, the Conservative Party chairman,  has privately admitted “directing” Tory donors to give money to the campaign to keen Britain in the European Union. 

Telegraph


Why I will be voting to stay in Europe

The EU has its failings but it also provides stability for fledgling democracies and keeps our kingdom united - we would be foolish to leave


 






William Hague: 'As a Conservative, I want to bring powers back from Europe' - We won t leave Europe, but it won t rule us

William Hague: "It is high time for a vigorous debate on our future in Europe to get going."  Photo: AFP

 







 




http://www.telegraph.co.uk/comment/columnists/william-hague/

By William Hague

7:32PM GMT 22 Dec 2015

Comments 75 Comments

 




In Downing Street last year, I was sitting with David Cameron and George Osborne listening to a summary of that day’s newspapers when we were told of an article saying I might be Britain’s next European Commissioner. At a time of many grim tasks, this report provided a moment of welcome hilarity – for my colleagues knew that the likelihood that I would want to take myself off to Brussels and work in the heart of EU bureaucracy was about the same as me volunteering to sweep the streets in Timbuktu.


Clearly, some speculating journalist had mistaken my willingness to work with the EU’s institutions while I was Foreign Secretary for actually liking them enough to join them. And I am often asked whether the years I spent in EU meetings and negotiations made me less Eurosceptic than when I toured the country 15 years ago with my “Save the Pound” campaign.

 



 



We still need the EU to provide the safe harbour for the docking of fragile democracies, and it would be strange to champion that idea but abandon it ourselves.

 


 


 



The answer to that is “no”, since close acquaintance with central bodies of the European Union does nothing to create enthusiasm for them. The Commission itself, generally the best-performing of the EU institutions, could benefit from the spending cuts and rigour to which most national governments have been subjected. The European Court of Justice has pushed the boundaries of treaties and is capable of imposing burdens on businesses which suggest a detachment from reality.


As to the European Parliament, it does not remotely provide democratic accountability for the simple reason that most voters across Europe do not take elections to it seriously and are not usually aware of the identity of their MEPs. It is not possible to be accountable and anonymous at the same time.

 


 


 


The result is that the EU really is remote, expensive and over-regulating. Somehow, the continent that hosts the music of Salzburg, the wine of Bordeaux, the art of Florence and the architecture of Paris has managed to produce the Justus Lipsius building in Brussels, where the Council of Ministers meet in windowless rooms devoid of any merit of design, pleasure on the eye, or chance sighting of a member of the public. If it had been constructed with the specific aim of draining the life out of any hopeful or inspiring thought, its builders could not have done a better job.

Even more worryingly, some of the most cherished projects of European unity are in deep trouble – the Schengen zone buckling under the weight of new migration, and the euro bedevilled by flaws which were obvious at the start. There is a legitimate question as to whether the EU can survive in its current form two or three decades from now.

It is high time for a vigorous debate to get going. So far, what I have written above would be cheered on by my old friend Liam Fox, who has advocated withdrawal, by old Cabinet colleagues tempted to campaign to leave in the forthcoming referendum, and even by Nigel Farage as he reels from the discovery that a rebel who joins you from another party simply becomes a rebel in your own.

Yet here I part company with these fellow critics of the EU, distinguishing between deploring the state of an organisation and deciding it is best to leave it. I wait, first of all, for the outcome of the negotiations the Prime Minister has launched, the importance of which should not be underestimated in continental capitals. What happens at the end of them will make a huge difference to sentiment in the Conservative Party, the perceptions of the media, the unity of the Government, and the view of British voters as to whether Europe is capable of positive change.

 


 



There is no doubt that without the United Kingdom, the EU would be weaker.

 


 


 


After that, even those of us who have poured scorn on the EU’s failings should assess dispassionately if it in the true interests of our country to depart it. The arguments about what is best for our economy will rage back and forth. Those who say we have to be in the single market to shape it and benefit from it have the edge, and that will be a vital edge as the public weighs the implications of their choice for their jobs and businesses.

For me, there will be two other major factors, which have not yet featured much in the early jousting ahead of the referendum, but which cannot be ignored. One is that, amid all the clumsy bureaucracy and failed ideas, the EU has provided the structure and the standards for new democracies across central Europe to establish themselves after their many decades of tyranny and tragedy.

And, crucially, this job is not yet done, for if the countries of the Western Balkans are shut out of European institutions, their festering divisions will create one crisis after another, on our own continent, of political turmoil, economic failure and uncontrolled migration. We still need the EU to provide the safe harbour for the docking of fragile democracies, and it would be strange to champion that idea but abandon it ourselves.

The second factor is a related one: whatever the shortcomings of the European “project” it is manifestly not in our interests for either it or the United Kingdom to fall apart. Such will be the challenges to the western world in the coming years, from a turbulent Middle East and a volatile world economy, that the dismembering of our own country by nationalists or the breaking up of Europe into uncontrolled rivalry would make many dangers more threatening still.

There is no doubt that without the United Kingdom, the EU would be weaker. It would lose the fifth largest economy of the world, the continent’s greatest centre of finance, and one of its only two respected military powers. We will have to ask, disliking so many aspects of it as we do, whether we really want to weaken it, and at the same time increase the chances, if the UK left the EU, of Scotland leaving the UK.

Scottish nationalists would jump at the chance to reverse the argument of last year’s referendum – now it would be them saying they would stay in Europe without us. They would have the pretext for their second referendum, and the result of it could well be too close to call.

To end up destroying the United Kingdom and gravely weakening the European Union would not be a very clever day’s work. So, even as a long-standing critic of so much of that struggling organisation, I am unlikely in 2016 to vote to leave it. 

Telegraph


Letters: England will not allow Scottish nationalists to hijack the EU debate

More important issues than Scottish independence; Oxford agitators; the real Coronation Stone; hospital agency fees; and a name for violence


 






Prime Minster David Cameron meets with Scottish First Minister and leader of the SNP Nicola Sturgeon at Bute House on May 15, 2015 in Edinburgh

David Cameron meets Nicola Sturgeon in Edinburgh  Photo: Jeff J Mitchell/Getty Images

 







 



 


7:00AM GMT 24 Dec 2015

Comments 444 Comments

 




SIR – It is widely believed that the unexpected Conservative majority returned to Parliament in May was in part secured because of a fear that a Labour victory would have led to Scotland being able to dictate to England in the House of Commons.


The people of England are much more likely to be influenced in their EU referendum vote by the matter of uncontrolled immigration than by threats from Scottish nationalists.


Ron Forrest
Wells, Somerset






SIR – William Hague’s assertion that Brexit would lead to the break-up of the United Kingdom is as illogical as it is scaremongering. It is not Government policy to offer a second independence referendum to Scotland.


If the UK leaves the EU, Scotland would actually be less likely to leave the UK for three reasons. First, as part of Brexit, major powers of great relevance to Scotland – such as farming, fishing, trade and environment – would be returned to the UK and could then be further devolved to Scotland.

Secondly, Scotland could not be sure it would be allowed back in the EU alone. Even if let in, after Turkey and Serbia’s accession in, say, 2025, it would be forced to adopt the euro and lose the rebate.

Thirdly, an independent Scotland would be born bankrupt. Oil prices are $36 a barrel now, while Scottish National Party economics relied on a figure of $100, and 65,000 jobs have been lost in the Aberdeen area recently. It would also lose £1,700 per head in UK public spending.

The Scots are canny and are more Eurosceptic than is often claimed; a third of the SNP is pro-Brexit and the only area of the UK to vote against joining the European Economic Community in 1975 was the Highlands and Islands.

David Campbell Bannerman MEP
Co-Chairman, Conservatives for Britain




SIR – Lord Hague’s description of the EU as a haven for emerging democracies is questionable at best, given its own democratic deficit.

The proposed acceleration of Turkey’s application for membership, in exchange for cooperation in the migrant crisis, gives the lie to the claim that the EU promotes democracy: that nation fails the EU’s own tests in most respects.

Stanislas Yassukovich
Oppède, Provence-Alpes-Côte d’Azur, France




SIR – My test for the referendum is whether Brexit would be beneficial for Britain, not other countries, and I have yet to hear a convincing argument in favour of staying.

Michael Staples
Seaford, East Sussex




SIR – If Lord Hague is right in saying that Brexit would cause Scotland to leave the Union, then a No vote would very effectively kill two birds with one stone.

Peter Amey
Hoveton, Norfolk 

 

Telegraph

If you want Britain to leave the EU, these numbers should worry you

EU referendum polls appear to have narrowed in the last few months, but the Outers are still very far behind where they need to be


 






 

Photo: ALAMY

 







 




By Matthew Goodwin

1:00PM GMT 21 Dec 2015

Comments 673 Comments

 




Look at the polls and you may conclude that this time next year Britain could have voted itself out of the European Union. Since the middle of November some have claimed that the referendum race has tightened considerably and that it is the Leave camp that now has momentum. Pointing to the poll of polls, they argue that support for Remain is down by three points to 51 per cent, while support for Leave has increased by three points to 49 per cent. Things are looking good, say the Outers; they are beginning to push ahead.

 



 



"This is a once in a lifetime opportunity to get back the independence and self-government of this nation"

Nigel Farage

 


 



A few individual polls have also given Eurosceptics cause for celebration. Earlier this month an unusually large survey of 10,000 citizens by Survation gave Leave a 42-40 lead, with the remainder undecided. Ukip’s leader Nigel Farage promptly claimed that "the tide has turned" and that Leave is finally holding the upper hand. Another mammoth poll by Lord Ashcroft, based on 20,000 respondents, suggested that while 38 per cent of people identified with Remain, 47 per cent aligned themselves with Leave. Even though respondents were not asked the actual referendum question, the headline stats further boosted the hopes of Outers.


But such headlines disguise some big problems for Leave – ones they would do well to contemplate over the festive break.


 


First, contrary to popular claims, there is actually not that much evidence that the race has tightened as much as some are claiming. As John Curtice notes, when you look across all of the polls that have been undertaken since the ballot question was finalised, there is not much convincing evidence of a decisive shift to Leave. In November the Remain camp’s lead may well have been cut town to just two points, but in the current December tracker it is back up to ten points. This is not exactly a turn of events.

 


 



"When it comes to referendums we know from research that as polling day nears voters become less supportive of change"

 


 


 


Second, the polling companies that have so far tended to put Leave ahead have also been the usual suspects. Of the 38 polls that have been collected since the beginning of September, only seven have put Leave ahead. Of these four were by YouGov and three by Survation. This is not a criticism but these are also two companies that analysis has shown tend to produce more support for Leave.

Moreover, there are sharp differences between online and telephone polls. When one looks only at telephone polls then it is Remain who hold a very comfortable lead of between 24 and 28 points. The problem for campaigners is figuring out which of these methods – online or phone – is correct, because they are currently producing wildly different outcomes. Still, the central point remains: despite all of the hype, there is not really much evidence at all that Leave is pushing ahead.

This brings us to a more fundamental problem for Leave – the wider climate. When it comes to referendums we know from research that as polling day nears voters tend to (though not always) become less supportive of the change option. You can see the beginning of this trend in data on the EU referendum race. When Lord Ashcroft probed perceptions of risk, he found that 53 per cent felt that the biggest risk lay with leaving the EU.

 


 


 


Outers will argue that these were fairly evenly matched by the other 47 per cent who felt that the bigger risk was staying in the EU, but they miss a crucial point. Among the undecided, those who will decide this race, a striking 61 per cent saw Leave as the bigger risk. This is why, in my view, Leave must establish a convincing lead ahead of the short campaign if it is to hold off against a gradual erosion of its support and stand a chance of victory.

And if it is true that the polls have not tightened as much as some claim, and Leave is behind Remain, perhaps by a wide margin, then an awkward question arrives: will Leave ever establish a commanding lead?

Just think for a second about all that has happened. Unemployment rates across the Eurozone have remained stubbornly fixed at above 10 per cent. A major refugee crisis has erupted inside the borders of the EU. The Paris attacks will, for many voters, have underscored an association between refugees and threats to security. Then there are the record high levels of net migration into Britain, accompanied by record high levels of public concern over immigration. And there is lots of research which shows how these identity concerns should be fuelling support for Leave. Not to mention David Cameron’s renegotiation that has been presented widely as a damp squib.

Put all of these things together and you may well argue that it is the Leave side that should hold a commanding lead. Only they don’t. They are behind. That means that something, somewhere, is going wrong. And as we may soon find out when the date for the referendum is set, the Leave camp might not have that long to try and fix it. 

Telegraph


EU referendum: David Cameron already planning pro-Europe dossier to keep Britain in the Union

Plans for pamphlet to be sent British households outlining why staying in the European Union is the right decision - despite Prime Minister's ongoing renegotiation with Brussels


 






David Cameron

Prime Minister David Cameron is laying the ground for supporting the campaign to keep Britain in the EU  Photo: Rex



 




By  Matthew Holehouse, and Peter Dominiczak

10:00PM GMT 20 Dec 2015

 




David Cameron is already preparing a pro-European Union dossier that will be sent out to British families ahead of the  in-out referendum.


In a move that has infuriated eurosceptics in the Conservative Party, it can be disclosed that Downing Street is already planning to issue a document explaining “why we need to stay in the EU”.


It will lead to accusations that the Prime Minister is pre-judging the  result of his ongoing renegotiation with Brussels and comes amid speculation that at least one Cabinet minister will resign in the New Year in order to campaign for Britain to leave the EU.

 



The dossier is being likened by sources to a pamphlet issued to every British household by Harold Wilson ahead of the 1975 referendum setting out an "independent" government analysis of his renegotiation, alongside the pro- and anti- campaign literature.


The plans were disclosed by Mats Persson, a No 10 adviser and former boss of Open Europe, in a briefing to senior Conservatives last month.

According to sources, Downing Street is planning to issue the document explaining to the British public "the changes, the benefits of the changes to Britain, and why therefore we need to stay in the EU."

Mr Cameron last week indicated that the in-out referendum will be held next year, with growing speculation that it will take place in June.

Prime Minister David Cameron attends the first working session of the Commonwealth Heads of Government Meeting at the Mediterranean Conference Centre in Valletta, Malta. PRESS ASSOCIATION Photo. Picture date: Friday November 27, 2015.Prime Minister David Cameron has been urged to allow Cabinet ministers freedom to campaign in favour of Britain leaving the EU  Photo: PA

However,  he prompted fury by stating that he intends to campaign for Britain to remain in the EU, despite his renegotiation not being complete.

Conservative eurosceptics are increasingly angry at what they see as a “sham renegotiation” by Downing Street.

At least one  Cabinet minister is known to be considering whether to in the coming weeks resign and join the “Leave” campaign.

Chris Grayling, Iain Duncan Smith and Theresa Villiers are all committed eurosceptics and there has been speculation about them quitting if Mr Cameron does not guarantee that he will allow members of his Cabinet to campaign for Britain to quit the EU.

Mr Cameron wants the EU to introduce a four-year benefits ban to keep down migrant numbers, but EU leaders have baulked at the idea and insisted it must apply to Britons too. But the PM has now been warned by officials that 300,000 Britons would lose entitlements to in-work benefits if he caves in to the demand.

 


In a further blow to Downing Street, Steve Baker, co-chairman of the Conservatives for Britain group which campaigns for an exit, said he believed more than half the Conservative Party "is strongly leaning to 'leave"'.

"Colleagues are substantially hardening up and saying this deal just isn't good enough," he told the Sky News Murnaghan programme.

Joining  calls for eurosceptic Cabinet ministers to be allowed "full freedom" to campaign to quit the EU, he said: "If those members of the Cabinet are not given freedom to speak their minds then there's going to be something of a pantomime for several months.

Polish Prime Minister Beata Szydlo with British Prime Minister David Cameron at a press conference in Warsaw

"I think it is inevitable that some members of the Cabinet will feel they have to resign if they are browbeaten into supporting a deal this flimsy."

Liam Fox on Sunday became the latest former Cabinet minister to join the campaign for Britain to quit the bloc.

 

However, Sir John Major, the former prime minister, dismissed "bogus" criticism of Mr Cameron's proposed reforms and appealed for a united front.

He suggested that members of Mr Cameron’s Cabinet may have to quit if they wish to campaign against the Government position of remaining in the EU.

"It would be extraordinary if anybody decided to campaign against Cabinet policy, at least until the negotiations are completed," he told BBC One's The Andrew Marr Show.

"When the negotiations are completed, I would very much hope that they would not wish to campaign against.

"This is bigger than the Conservative Party. The argument for the sake of the country is very important. And people deserve to hear a clear-cut argument, not an internecine piece of party strife."

In the Downing Street dossier, Britain's new deal will also be given a "label" to convince voters that real change has taken place.

It is understood officials are looking for are form of words that will give a "better articulation of a very specific relationship with the European Union", senior Tories have been told.

The Government was heavily criticised ahead of last year’s Scottish independence referendum for sending out a pamphlet to all households in the country urging them to vote to remain in the UK.

More than 2.5 million booklets were produced at a cost of around £720,000.

It is not yet known if the Downing Street EU pamphlet will be sent to every household in the UK.

A Government spokesman said: "As part of the EU Referendum Act we have committed to provide public information on the outcome of the renegotiation.

"We've always been clear that it is important that the British public are provided with the information they need to understand the consequences of their choice in the referendum." 




Telegraph


Tory chairman Lord Feldman 'admits directing donors to pro-EU campaign', MP claims

Steve Baker, the chairman of Conservatives for Britain, tells the Telegraph that Lord Feldman has conceded to him that he has been assisting wealthy Tory donors hoping to help the pro-EU campaign.


 






Lord Feldman is coming under pressure

Lord Feldman is coming under pressure  Photo: Steve Back

 


 
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By Peter Dominiczak, Political Editor

9:00PM GMT 21 Dec 2015

 


 




Lord Feldman, the Conservative Party chairman, has privately admitted “directing” Tory donors to give money to the campaign to keen Britain in the European Union, it has been claimed.


Steve Baker, the chairman of Conservatives for Britain, says that Lord Feldman has conceded to him that he has been assisting wealthy Tory donors hoping to help the pro-EU campaign.


The disclosure will deepen divisions in the Tory Party ahead of the in-out referendum and comes as eurosceptic MPs accuse the Prime Minister of pre-judging the result of his renegotiation with Brussels by openly saying that he wants Britain to remain in the EU.

 



The Conservative Party has pledged to stay neutral in the lead-up to the referendum, which David Cameron has indicated will be held next year.


Mr Baker writes for the Telegraph (below) that Lord Feldman has confirmed to him that he has “directed donors to give money to the pro-EU BSE [Britain Stronger in Europe] campaign”.

The Tory MP says that Lord Feldman has told him he is also referring donors to the Leave campaign.

However, the anti-EU campaign is “yet to receive a referral from our Party Chairman”, Mr Baker says.

Mr Baker accuses Lord Feldman of “fundraising” for the pro-EU group and calls on the Prime Minister to allow members of his Cabinet to assist the Leave campaign in their "spare time".

At least three Cabinet ministers are understood to be considering whether to resign in the coming weeks and openly campaign for a “Brexit”.

 


 


 


Mr Cameron is coming under intense pressure to allow ministers to campaign to leave the EU without having to resign.

Former cabinet minister Owen Paterson and Liam Fox are among the senior Tories demanding that the Prime Minister agrees to give members of the Government a free vote.

Mr Paterson said: "Considering how incredibly thin the Prime Minister's demands are and what he is likely to be granted by the other 27 (member states), it will be wholly incredible for some figures in the Cabinet to campaign for that."

At least six Cabinet ministers have told The Telegraph that they are privately demanding that Mr Cameron offers ministers a free vote.

“Lord Feldman, our Chairman, has confirmed to me that he has directed donors to give money to the pro- EU BSE campaign in a personal capacity and in his spare time,” Mr Baker writes.

“He also tells me that he will point people in the direction of the Vote Leave campaign, but they are yet to receive a referral from our Party Chairman.

Lord Andrew FelmanLord Andrew Felman   Photo: PA

“Lord Feldman is a member of the political cabinet. His fundraising for BSE undermines the Government’s policy of seeking real reform before deciding how to vote. Now he has admitted this new part time role, shouldn’t the Prime Minster allow other cabinet members to help Vote Leave in their spare time?”

Lord Stephen Gilbert on Monday stood down as a deputy chairman of the Conservative Party following criticism from Tories including Mr Baker over his links to the campaign to keep Britain in the EU.

Lord Gilbert was a key part of the Conservatives’ election campaign but angered eurosceptic MPs by in November taking up a part-time position at Populus, the official polling company for the pro-EU campaign.

A Conservative spokesman said: "Donors will call Lord Feldman to ask how to support both the 'in' and 'out' campaigns. Lord Feldman will simply direct them to the relevant people on the campaigns. It is up to the individual donors themselves if they then chose to contact or support either campaign."

It came as Conservative grandee Lord Heseltine warned that Mr Cameron will make himself an international "laughing stock" if he bows to demands to give ministers a free vote in the upcoming referendum on Britain's membership of the EU.

Lord Heseltine, the former deputy prime minister, told the BBC that a free vote for ministers would undermine the Prime Minister's authority and plunge the Conservative Party into a bitter civil war from which it would struggle to recover.

 


Steve Baker writes:

 


The Conservatives  won the general election united behind David Cameron in our desire for fundamental change in our relationship with the European Union. It is now clear this will not happen. David Cameron isn’t asking to take back control of our borders, to end the supremacy of EU law or for the power to make our own trade deals. 

The choice is now crystal clear: to stay in an unreformed and integrating EU or to leave, end the supremacy of EU law and negotiate a new relationship based on trade and co-operation. 

Unfortunately, at a time when perception is everything, many of the Conservative top team are being parachuted in to run the campaign to remain in the EU at all costs. 

Our Party has agreed to stay neutral in the campaign, so I am delighted to congratulate Lord Stephen Gilbert on wisely giving up his Party and Government position and access. It is right that he should campaign full time either for the permanent supremacy of EU law or for the Conservatives – not both. 

Concerns about others working for the pro-EU BSE campaign as well as the Party remain. Expert digital campaigning consultants Tom Edmonds and Craig Elder work both on Conservative campaigns and for BSE. They have access to sensitive data on millions of voters and to sophisticated voter targeting techniques. This conflict of loyalties presents a grave reputational risk. 

Even more troublingly, Lord Feldman, our Chairman, has confirmed to me that he has directed donors to give money to the pro- EU BSE campaign in a personal capacity and in his spare time. 

He also tells me that he will point people in the direction of the Vote Leave campaign, but they are yet to receive a referral from our Party Chairman. 

Lord Feldman is a member of the political cabinet. His fundraising for BSE undermines the Government’s policy of seeking real reform before deciding how to vote. Now he has admitted this new part time role, shouldn’t the Prime Minster allow other cabinet members to help Vote Leave in their spare time? 

If EU politicians won’t listen to our Prime Minister, I still hope he will lead the campaign to leave. On the basis of his closest allies’ recent actions, however, it appears that he too is looking to campaign for us to stay, come what may. 

- Steve Baker is the Tory MP and chairman of Conservatives for Britain


 





Telegraph

David Cameron should allow ministers to campaign for Brexit, says Lord Lawson

The Eurosceptic peer has said it would be "sensible" for the prime minister to allow his Cabinet to speak out on both sides of the debate ahead of a referendum


 






Lord Lawson: the subject of a bizarre personal attack as a climate denier by Sir Paul Nurse, president of the Royal Society

Lord Lawson on the terrace of the Houses of Parliament  Photo: Andrew Crowley for The Telegraph

 







 




By Laura Hughes, Political Correspondent

7:43AM GMT 22 Dec 2015

 




Lord Lawson has called on David Cameron to allowed ministers to campaign to leave the European Union.


The Former chancellor and Eurosceptic peer said it would be "sensible" for the prime minister to allow his Cabinet to speak out on both sides of the debate.


His comments come as Lord Heseltine warned Mr Cameron  he would become a "laughing stock across the world" if he allowed ministers to campaign for Brexit. 


British Prime Minister David Cameron walks past an EU flag during his visit in Brdo pri Kranju, SloveniaBritish Prime Minister David Cameron walks past an EU flag during his visit in Brdo pri Kranju, Slovenia   Photo: REUTERS/Srdjan Zivulovic


The former deputy prime minister has said that Cabinet ministers should resign if they want to campaign to leave the EU,  or risk creating a "civil war" that could split the party.


 The former chancellor told the Daily Mail: “It would clearly be sensible in terms of party management to allow Cabinet ministers to speak out on both sides – once the date for the referendum is set – not least to enable the Conservative party to reunite easily once the referendum is over, whatever the result.

“That is what Wilson decided in 1975 and he was right. He may have been a bad prime minister, but he knew about party management.” Lord Tebbit Lord Tebbit  Photo: Andrew Crowley


Earlier this year the peer announced he had taken on role the role of president of Conservatives for Britain and would lead a cross-party exit movement ahead of the EU referendum.

His former colleague Lord Tebbit also claimed Mr Cameron was "subservient" to Brussels.

He told the Sun: “I think Cameron has decided, or it is being decided for him, that we should remain in the EU on any terms."

 


It comes as The Telegraph revealed Lord Feldman, the Conservative Party chairman, has privately admitted “directing” Tory donors to give money to the campaign to keen Britain in the European Union.

The Conservative Party has pledged to stay neutral in the lead-up to the referendum, which David Cameron has indicated will be held next year.

Downing Street is yet to make a decision on whether collective responsibility will apply ahead of the referendum, but the prime minister has made it clear expects every member of his Cabinet to back his renegotiation.










Telegraph


Ministers should resign if they want to campaign to leave the EU, says Lord Heseltine

Former deputy prime minister warns David Cameron would become a "laughing stock across the world" if he allows ministers to campaign for Brexit


 






Lord Heseltine speaks at the launch of the Greater Birmingham Project, in Birmingham. PRESS ASSOCIATION Photo. Picture date: Thursday January 3, 2013.

Lord Heseltine  Photo: DAVID JONES/PA



 




By Laura Hughes, Political Correspondent

12:07PM GMT 21 Dec 2015

 




David Cameron would become a "laughing stock across the world" if he allowed ministers to campaign to leave the European Union, Lord Heseltine has warned.


The former deputy prime minister has said that Cabinet ministers should resign if they want to campaign for Brexit, or risk creating a "civil war" that could split the party.


Downing Street is yet to make a decision on whether collective responsibility will apply ahead of the referendum, but the prime minister has made it clear expects every member of his Cabinet to back his renegotiation.


Britain will weaken position on world stage if it leaves EU, says USAWith David Cameron now saying a Britain out of Europe was now 'imaginable', US agitation has reached a new high  Photo: Thierry Roge/EPA


Lord Heseltine told BBC Radio 4's Today programme: "If they feel so strongly, if the issue is as you say, then they should resign.


"Although it is quite difficult for me to understand how they're in the Cabinet in the first place if they feel so strongly.

“[Allowing a free vote] would be to make the prime minister a laughing stock across the world."

The UK will vote to stay in or leave the EU by the end of 2017  Photo: Alamy

“To have a civil war within the Conservative party at that time, in the belief that the referendum having been determined, the participants in the civil war are going to sit around the table and happily smile together, is, I think, rather naive,”

His comments come as The Telegraph reveals Mr Cameron is already preparing a  pro-European Union dossier that will be sent out to British families ahead of the in-out referendum. 

According to sources, Downing Street is planning to issue the document explaining to the British public "the changes, the benefits of the changes to Britain, and why therefore we need to stay in the EU."

Owen PatersonOwen Paterson  Photo: GEOFF PUGH

During negotiations in Brussels last week, Mr Cameron hinted that that the referendum will be held next year, with growing speculation that it will take place in June.

Owen Paterson, the former Environment Secretary has said he believes ministers should be allowed to campaign for whichever "side they want in the referendum."

Fellow eurosceptic Graham Brady, the chairman of the 1922 Committee, said he believed that when ministers know what the shape of the renegotiation secured looks like, "then we may need to go to a different place." 


Telegraph

Could the European football championship swing the EU referendum?

David Cameron would be taking a sporting gamble if he decided to hold the Euro referendum in June 2016 – during the UEFA tournament


 






David Cameron

Prime Minister David Cameron is laying the ground for supporting the campaign to keep Britain in the EU  Photo: Rex 



 




http://www.telegraph.co.uk/comment/columnists/philipjohnston/

By Philip Johnston

7:50PM GMT 21 Dec 2015

 


Comments 9 Comments

 




David Cameron now has his “pathway” to a Euro-deal in February. As Sir John Major said on Sunday, once the EU has set itself the task of concluding these negotiations on mutually agreeable terms, then an accord will be reached. That is the way the institution works. Sir John believes the UK should stay in whatever the outcome; but that will be for the electorate to decide. We are, after all, to have a referendum. We can make up our own minds whether Mr Cameron has delivered the new relationship he promised.


The big question now is when that might happen; and around this all sorts of shenanigans are about to take place. For instance, if the Government wants to relax the so-called “purdah” rules – which restrict official involvement in the campaign – then four months’ notice must be given following a Tory Eurosceptic amendment to the Referendum Bill. Their principal aim was to stop Mr Cameron springing a snap poll, though the Commons must approve whichever date he selects, which must be before the end of 2017.

 



 



With such a big decision at stake it may seem frivolous to suggest that a sporting event could influence the outcome; but it has before.

 


 


 



The Electoral Commission, acting as an independent arbiter, has said that regulations governing the referendum should be in place at least six months before the vote, in order to allow all sides to participate equally. Arguably, these are now enshrined in the Referendum Act which has just received Royal Assent. As to the campaign itself, there are no legal provisions prescribing its length, though the Government has promised a minimum of 16 weeks – six weeks to get the required rules agreed by Parliament and a 10-week campaign.


 


 


 


If a deal is reached in Brussels on Feb 18/19, therefore, it is just about feasible to stage the referendum in June or early July. Indeed, some campaigners already have June 23 pencilled into their diaries. “That’s about 180 days away - not very long in electoral terms,” one leading Outer told me. Mr Cameron is said to favour June if only to get it over and done with and stop the inevitable Tory split running on for another year. So, this great moment may be upon us sooner than we think. But there is one imponderable that the Prime Minister needs to factor into his calculations: football. From June 10, the European championships are being held in France; and England, Wales and Northern Ireland will all be represented.

With such a big decision at stake it may seem frivolous to suggest that a sporting event could influence the outcome; but it has before. For men of a certain age, because we were then football-mad schoolboys, Sun June 14, 1970 is a day seared upon our memories. The place was Leon in Mexico, a broiling afternoon in the tropical sun. The event: England v West Germany in the knock-out stages of the World Cup, the old rivalry renewed. Four years earlier England had triumphed 4-2 at Wembley and were favourites to progress to the final. And with 25 minutes to go everything was going to plan. Some of the finest players ever to pull on the white shirt (though they wore red that day) were 2-0 up and heading for a semi-final against Italy. Then, calamity: the Germans pulled two goals back and sank England with a winner in extra–time.

 


Might this defeat have affected the outcome of the general election just four days later? After all, what better whipping boy for a disappointed nation than the government of the day? Labour had been widely expected to be returned to office, but the Conservatives, led by Edward Heath, unexpectedly won a majority of 30 seats. The defeated premier, Ha


 
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