After the EU’s parliament election, businesses have been advised to keep an eye on developments and to make clear political demands before the EU policy agenda is finalised.
The 27 member states of the EU have elected a new parliament.
The vote count has not yet been completed, but current projections indicate a win for the European People's Party (EPP) with 186 seats in parliament - the party of current Commission president Ursula von der Leyen. The second strongest party is the Socialists & Democrats (S&D) with 135 seats. The Renew Europe group of political parties, with 79 seats, and Greens group, with 53, made the biggest losses.
These figures are based on preliminary results as of 11:30am CEST on 11 June.
Mark Ferguson, public policy expert at Pinsent Masons, said: "As the results stand, the preexisting coalition between the EPP, the S&D and Renew would hold 401 seats in the European Parliament. But there will likely be some changes to the groupings with the Parliament, as the results are finalised and individual political parties look to maximise their influence and political groups seek to increase their numbers."
Hear Mark Ferguson discuss this story on The Pinsent Masons podcast here or wherever you get your podcasts.
Ferguson pointed out that nominally it was a good night for Commission president Ursula von der Leyen, but that she will be facing two challenges: "Firstly, von der Leyen will need to get the support of the Council of the EU, secondly, she'll then need to win the support of Parliament. In Parliament the combined 401 seats held by the EPP, the S&D and Renew is technically enough to secure her the support of the Parliament. But not all MEPs from these groups will support von der Leyen, so she needs to broaden her support in Parliament. Therefore, she will need to build support beyond these groups in order to guarantee her success."
The European Parliament will officially begin on 16 July with the first constitutive plenary session in Strasbourg. On that day, MEPs will be electing the Parliament's president and 14 vice-presidents. They will also vote on the committees. Finally, there will be a vote on the President of the Commission and the College of Commissioners will be voted upon. The timing of the announcement of European Commission president is still unclear with some suggestions that this could be pushed through in July, though the initially suggested timing is Autumn 2024.
"Companies should be focusing on understanding the results through structured and consistent horizon scanning, comprehensive stakeholder mapping of MEPs, their interests and where this overlaps with your sector, and defining clear policy asks ahead of the policy agenda for the EU being finalised," Ferguson said.
Some specific new legislation that is likely to materialise under a von der Leyen presidency includes new climate legislation where a new 2040 climate goal is expected to be proposed, as well as a new Biotech Act, Digital Networks Act and a Critical Medicines Act.
Some legislative initiatives that have already been commenced will also carry over for completion in the next European Parliament and Commission presidency term. This includes proposed reforms to the EU’s general pharmaceutical legislation, as well as revisions to the Waste Framework Directive designed to improve the environmental sustainability of food and textile waste management.
While the EU's public policy is temporarily in limbo, the election has had particularly serious consequences in France: After Marine le Pen's right-wing populist National Rally made strong gains and left president Emmanuel Macron's party behind with 31% of the vote, the president dissolved the National Assembly and called in new elections. All legislative projects in France have therefore been put on hold. The election is to take place in two ballots at short notice on 30 June and 7 July. However, Macron’s office is not at stake as the next presidential election is not scheduled until 2027.
The right-wing nationalists were already ahead of Macron's camp in the last European elections in 2019. However, while the right only had a narrow lead at the time, they have now increased this significantly and probably won around twice as many votes as Macron's centrists.
"Macron lost his parliamentary majority after the 2022 elections so he hasn't called the election from a position of absolute power, and it's been a difficult period trying to progress his legislative agenda," Ferguson said. "While the RN is the largest single opposition party in the National Assembly it currently only has 88 seats. Current polling has the RN leading but it will likely need to build a coalition of support to take control of the Assembly."
In Germany, too, the balance of power could shift after the European elections, as there are already calls for chancellor Olaf Scholz to resign and start new elections after his party, the Social Democrats, achieved only 14%, while the Christian Democrats - the party of former chancellor Angela Merkel – was the strongest force with 30%, followed by the extreme-right Alternative for Germany with 16%. Unlike Macron, however, Scholz has not yet drawn any consequences from the defeat.
Scholz' situation is similar to chancellor Gerhard Schröder’s predicament in 2005, when he called new elections after his Social Democrats suffered a defeat in a state election in 2005. Back then, his party lost the federal election and Angela Merkel became chancellor.
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