+++ (FT) Brussels briefing: The Dutch question

(FT) The Netherlands votes today on the EU’s trade pact with Ukraine. Polls suggest the deal will be rejected. But what will it actually mean? For an answer to that, prepare to enter the topsy-turvy world of Dutch referendums.

Here are some of the contradictions to grapple with. The plebiscite is merely advisory. Most Dutch politicians support the Ukraine deal. Two-thirds of voters say they have no idea what was agreed with Kiev, according to I&O research. Even the referendum organisers were not particularly interested in the details. Yet, in spite of all that, this vote may have some real political consequences for the Netherlands and the EU.

The first muddle is over what it means for the Ukraine trade deal. The Dutch government has little choice but to act on a No vote, if there is a half-decent turnout (over 30 per cent). In other words the Ukraine agreement may never be ratified (it needs unanimity from EU states).

But – read this carefully – its provisional application may still survive (repealing it also needs unanimity). So the trade benefits temporarily enjoyed by Ukraine today could continue for some time. The question is how long the EU can live with the hypocrisy of a provisional deal that will never becomes permanent. That will require a political fudge of some sort. But Brussels is the place for such things.

Then there is the tangled question of what the vote is actually about. Some say it isRussia and Vladimir Putin. Other darkly mutter this is all a Russian plot to destabilise Ukraine and the EU (Russian diplomats joke that this was a Dutch gift they didn’t have to pay for). Voters on the other hand tell pollsters their worry is corruption in Kiev (not helped by revelations from the Panama Papers). To confuse matters further, some of the campaigning has involved gory posters of mistreated chickens.

If there is a No vote, though, the clear winners are eurosceptics. The result will be the latest in a miserable run of referendum defeats for pro-EU politicians. Denmark thumbed its nose at the option of more integration in December, the Dutch are now poised to blow a raspberry at a trade deal and the EU in general, and the British look close to abandoning the club in June. The implications of the Dutch vote should not be overstated: it is unlikely to hasten Brexit, or be a watershed for the EU. But as Judy Dempsey writes for Carnegie Europe, it is further proof that EU champions need to learn how to campaign and stop running scared of the ballot box.

The revelations about offshore activities roll on. Iceland’s premier Sigmundur David Gunnlaugsson resigned on Tuesday, becoming the first casualty of the Panama Papers. David Cameron struggled to scotch questions over his late father’s role in tax avoidance and possible benefits enjoyed by his family at some point. Associates of the Marine Le Pen, the French far-right leader, wriggled under the spotlight. The new head of Fifa cameunder pressure too.

Regarding the policy response, Nicholas Shaxson argues in the FT that the big problem is “armies of offshore enablers looking for loopholes: accounting firms, offshore company formation agents and trust companies and banks”. The FT, the Wall Street Journal andLe Monde take a look at some of the banks under scrutiny, including HSBC, Société Générale and Credit Suisse.

One of the founders of the law firm Mossack Fonseca meanwhile dismissed the “witchhunt” against a legitimate offshore industry. “It’s like if you buy a car and sell it to a dealership and it sells it to a woman who kills someone — the factory isn’t responsible,” Ramón Fonseca told the FT. That must be an old Panamanian proverb.

The Pope, Lesbos, asylum reform

This should be interesting. The Pope is preparing a visit to the migrant hot-spot of Lesbos next week to see first-hand the plight of refugees. The timing of the Papal visit is less than ideal for EU authorities, who are under fire from the UN and aid agencies over a controversial deal to return asylum seekers to Turkey.

Around 200 migrants were returned to Turkey on Monday, but more than 300 landed on Greek islands on the same day. Returns are largely on hold for the moment because most of the around 6,000 migrants on Greek islands are seeking asylum. With EU countries only offering Greece just 22 of the 400 interpreters needed, they may have a long wait for their applications to be processed. Francois Hollande speaks to Bild Zeitung today, stressing that resettlement from Turkey is only possible if external borders are under control.

The European Commission, meanwhile, will unveil its option paper today to overhaul rules on who is responsible for asylum claims (the so-called Dublin system). The FT’s Duncan Robinson saw a leaked draft in early March and the basics are the same. Two main options are outlined. The first is to fundamentally reshape the bloc’s system and would result in all asylum seekers being shared out across the EU on a quota basis, regardless of where they first arrived (that’s what Greece and Italy want and eastern Europe will try to block). The other would build on the status quo, with asylum seekers shared out on a quota basis if a country is overwhelmed by a sudden influx (the French helped design this compromise route). The longer term plan is to centralise the handling of asylum claims. The politics around this is fraught, even in countries like the UK that are only marginally affected.

Nagorno Karabakh

A ceasefire was called on Tuesday between Armenia and Azerbaijan after days of fighting over the Nagorno-Karabakh region. It seems to be holding but there are doubts over how long. Thomas de Waal of Carnegie Europe describes it as the “most menacing”of all the conflicts that erupted with the break-up of the Soviet Union. There are international efforts to calm things down. But even Russia has for decades struggled to impose its will on this conflict, attempting a balancing act between providing security for Yerevan without fully alienating Baku. Throw some Russo-Turkish tensions into the mix(Ankara is a backer of Turkish-speaking Azerbaijan) and it is not hard to see how this could end badly.htybf