European Parliament election to significantly alter dynamics during the next legislative mandate

With the European Parliament (EP) elections only a few weeks away, the outcome this time around is more uncertain than it has previously been. With rising support for fringe parties – both on the right and on the left of the political spectrum – it is almost certain that there will be a weakening of parts of the political centre – in particular the centre-right European Peoples’ Party (EPP) and the centre-left Social Democrats (S&D). This in turn means it is very likely that the EPP and S&D will for the first time no longer command a majority between each other after the May election.

The dynamics in the new European Parliament will also significantly depend on several other questions:

  • Will the United Kingdom conduct European elections after all?
  • Will the far-right political parties succeed in forming an alliance and in turn a unified faction in the new EP?
  • Will Emmanuel Macron take his La République En Marche (LREM) pro-European platform into the liberal ALDE faction in the EP?

The UK conducting European elections next month would ultimately – at least at the outset – complicate proceedings in the EP and change the dynamics as political factions are formed, Committee Chairs appointed, and hearing with candidates for European Commissioner roles conducted. The UK holding the election would also mean that a planned reduction in seats in the EP from currently 751 to 705 will no longer take place. This will equally require a reallocation of these seats once the UK has left the EU – currently scheduled for the end of October. In terms of political trends, a UK EP election would also mean a lesser degree of decline for the centre-left S&D due to the current strength of the Labour Party.

Equally UK Members of the European Parliament (MEPs) returning to the Chamber could undermine plans by far-right leaders to attract parties from the right-wing faction (ECR) that currently includes amongst others the UK Conservative Party, the Danish People’s Party, and the Polish Law and Justice Party to a new European Alliance of Peoples and Nations that would bring the aforementioned parties together with the Italian Lega Nord and the French far right in one political faction.

Looking beyond the question of the UK’s participation in the election at other dynamics that will shape the new Parliament there will be an increased fragmentation that will force stronger cooperation between the EPP, the S&D, the liberal ALDE, the Greens, and Macron’s LREM. This need for broader cooperation will largely be driven by declining political strength of the S&D group once UK Labour MEPs have left. The changing majorities for the large political groups will also mean that the Greens will become much more essential for building stable majorities. This in return is likely to lead to more volatile and unpredictable outcomes of political discussions.

This expectation of a stronger degree of influence of the Greens over politics in the European Parliament is also likely to mean that there will be a greater prevalence for their core issues being pushed through in final deals given their political savviness. These could include increased conditionality for trade agreements, a more interventionist agenda on financial services, and activism on taxation and financial crime.

Overall, the make-up of the next EP is likely to be very different to the current chamber, with more fragmentation likely to require more cooperation – and horse-trading in policymaking – between the main pro-European forces in the EP – the centre-left, the centre-right, the Liberals, the Greens – in order to secure stable majorities.

Articles


Photo from Treasurers: Reconciling Innovation and Resilience

Treasurers: Reconciling Innovation and Resilience

After a record attendance to the 2023 AFTE days, AFTE expect over 1,800 attendees to the upcoming edition that will take place on 25 and 26 November. For 2024, AFTE thought big and chose a new, larger venue at the CNIT Paris La Défense.

Read
Photo from Annual Conference of the Romanian Treasurers Association

Annual Conference of the Romanian Treasurers Association

On 8th October 2024, the Romanian Treasurers Association (ATR) held its 9th edition of the annual conference at the National Bank of Romania. The event brought together financial experts, treasurers, and industry leaders to discuss critical topics shaping the financial landscape.

Read
Photo from Trends in Treasury and Leadership

Trends in Treasury and Leadership

Interview with José-Carlos Cuevas, European Association of Corporate Treasurers (EACT) Board Member for Spain from 2007 to 2024.

Read
Photo from Staying Ahead: Focus on What is Trending Within Treasury Automation

Staying Ahead: Focus on What is Trending Within Treasury Automation

Treasurers should look for ways to use latest technologies to increase profitability and efficiency, especially in FX management, a still highly manual process.

Read
Photo from The LEI's Role in Streamlining European Payments

The LEI's Role in Streamlining European Payments

The inclusion of the LEI in the EU’s Instant Payments Regulation means that organizational identity can now transform the EU payments ecosystem.

Read