David Cameron’s stick or twist dilemma

April 27, 2015

Britain's opposition Labour Party leader Ed Miliband speaks at an election campaign event in north London

To a collective sigh of relief, Britain’s political parties enter their last full of week of campaigning ahead of May 7 elections. There have been endless talking points but as yet no turning point.

Different polls put Labour or the Conservatives ahead but none suggests either will have a parliamentary majority and the poll of polls – which aggregates all the surveys – puts the two main parties neck-and-neck. Labour Party has a one percentage point lead over Prime Minister David Cameron’s Conservatives, according to the latest opinion poll from YouGov.

On Sunday, opposition Labour leader Ed Miliband moved to counter the ruling Conservatives’ claim that he would form a coalition with Scottish Nationalists and offer old-style profligate left-wing government that would break the bank and the UK, by ruling out any sort of post-election deal with the SNP.

There is some wiggle room here – the Scots nationalists could well vote for key measures proposed by a Labour government to prop it up in order to keep the Conservatives out. The polling numbers suggest the two parties may get the combined parliamentary numbers to force legislation through.

The Conservatives’ line of attack may be gaining some purchase among English voters but it is a negative gambit following the failure of a strategy focusing on economic “competence versus chaos” to achieve lift-off.

It also suggests they are admitting the possibility of defeat. There is an increasing clamour among Conservative supporters for Cameron to launch a late drive to give Britons a positive reason to vote for them. Others say it is too late now to change tack.

Furthermore, by painting opposition Miliband as hapless the Conservatives set the bar so low that he has exceeded expectations.

None of this is to say that Cameron won’t be prime minister after May 7 but it is he who faces the bigger campaign choice about whether to stick with the message or try and broaden it in the closing days.

The campaign has largely been tedious. The result and its aftermath will be anything but with the UK’s future cohesion (Scotland in or out) and its membership of the EU potentially at stake. UK markets, however, have yet to take fright in any way.

There are a clutch of other elections nearer to hand.

Kazakhstan’s President Nursultan Nazarbayev won a new term by a landslide on Sunday, winning 97.7 percent of the vote. Nazarbayev, who has ruled the oil-rich nation since 1989, was virtually unchallenged with no strong opposition rivals running.

A leftist moderate promising to push for a peace deal in ethnically-split Cyprus swept to victory in a Turkish Cypriot presidential election runoff on Sunday. Mustafa Akinci, standing as an independent beat incumbent president Dervis Eroglu, a conservative elected five years ago.

Togo’s presidential election took place without major incident on Sunday. Results should come today. Incumbent Faure Gnassingbe is widely expected to win a third term.

Burundian police shot dead two protesters and wounded at least one other in demonstrations against the president seeking a third term which critics say would violate a constitutional limit of two terms. African leaders and Western nations have urged President Pierre Nkurunziza not to run again, and the United States and the European Union have indicated they could take punitive steps if violence erupted as a result.

As the dust settles after another “week to save Greece” which didn’t, it seems like next week may not be a decisive one. After failing to make headway in Riga, officials are already looking ahead to the next meeting of euro zone finance ministers on May 11, a day before Greece has to make a 750 million euro payment to the International Monetary Fund.

Prime Minister Alexis Tsipras will give a live television interview this evening after the Eurogroup came out hard on Friday, declaring after a heated meeting that the Greek government will get no more aid until it agrees a complete economic reform plan.

On Sunday, Tsipras and German Chancellor Angela Merkel agreed in a phone conversation to keep an open line of communication over talks to secure a debt deal. German Finance Minister Wolfgang Schaeuble hinted on Saturday that Berlin was preparing for a possible Greek default, drawing a parallel with the secrecy of German reunification plans in 1989.

There are some reasons for hope. New concessions have been offered by Athens on some of the reforms demanded by its lenders, including proceeding with some privatizations and setting up an independent tax commission. But on labour reforms and pensions the gap is gaping wide.

There may be some willingness within the euro zone to lower the target size of Greece’s primary surplus, which would give it a bit of leeway to spend more. But there are a lot of “ifs” still and Greek Finance Minister Yanis Varoufakis was left utterly isolated in Riga.

Tsipras and Varoufakis have a perfectly legitimate argument that piling on more austerity is not a clever way to try and reduce a debt mountain. But no one is claiming their negotiating tactics have been adroit.

The Bank of Israel will deliver its latest monetary policy decision and is expected to leave short-term interest rates unchanged at a record low 0.1 percent, although analysts say the chances of a rate cut have increased due to a strengthening of the shekel.

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