European Parliament Election Results: A Swing to the Centre Right But Further Right in France
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This week-end’s European Parliament elections produced the widely expected swing to the right, albeit more an electoral rebuff for incumbent ruling parties as voters registered their protests against current governments. Hard-right parties largely did well but there were clear exceptions (Belgium and Hungary), with the main beneficiary as far as the EU parliament is concerned being an increased showing for the centre-right EPP grouping alongside a drubbing for the Greens. This should thereby consolidate the centrist majority that should mean a continuation of current policies and a second term for current European Commission President Von der Leyen. France may look an exception given that President Macron party’s poor showing convinced him to call a surprise parliamentary election. Worries that this could usher in a far-right administration look overdone. Instead, it may mean Macron’s already minority government is weakened even further, compromising its already-limited ability and willingness to address growing fiscal problems with a structural budget gap stuck at 5% of GDP.
Figure 1: Europeans Swing Somewhat to the Right
Source: Politico
Centre-Right Consolidate
Compared to the last (2019) result, opinion polls had clearly flagged the clear swing to right-wing and/or populist parties that actually occurred. However, the swing was as much to centre right as far right, to a degree that the current parliamentary majority held by more centrist and pro-EU factions (S&D were little changed; EPP a clear winner; Renew and Greens clear losers - Figure 1)). With still some votes to be counted, it seems these pro-EU factions will win a majority of around 410 of the 720 seats in the European Parliament. As a result, the new parliament should retain a steady pro-EU coalition despite the rise of far-right Eurosceptics across Europe.
More of Same Fiscally?
The right-wing groups, however, are expected to increase their seat count by over 50, but with little immediate effect. Indeed, it notable that if the far right were to form a single group it would be the second largest force in the new parliament, behind only the traditionally dominant EPP, but rivalries and divides make this unlikely. However, its sheer size will nonetheless put rightward pressure on EU policy. And there may be consequences through the next EU parliament as they may instead try and block reforms on on issues such as EU integration, green transition and migration. However, on the key fiscal side, as the current EU budget runs until 2027, this means that the new parliament can only effect the EU budget from 2028 and is also restricted somewhat by the new EU fiscal rules, all suggesting the elections will not impact fiscal policy near-term. The results increase the possibility of EPP candidate Ursula von der Leyen being re-elected as European Commission.
Traditional Protest Vote
Admittedly, there may be concern that the gain by right wing and possibly EU-sceptic parties may be setting a staging post for winning a majority at the next European election in 2029, but many things can happen in the interim. Moreover, the election results (as they often are) should be seen as much as voter disenchantment with current governments amid economic pain than genuine and durable swings to the right - Italy being a clear exception. Notably, voter protest was perhaps clearest in Germany as Germany’s far-right Alternative for Germany party (AfD) boosted its vote share to 15%, notably winning support from the youth vote and despite a series of scandals
Where the election may have some impact is diplomatically, especially with China, the US, and the Ukraine. The changing dynamics in parliament, which also approves the new European Commission, has already seen a more belligerent stance on China, particularly in the electric vehicles sector, something that current European Commission President Von der Leyen will probably continue in her likely second term promises more restrictions. Regardless, the ultimate decision-making body in EU foreign policy remains the European Council, which comprises the EU country heads of states and governments, albeit with clear divides evident within too.
France Faces Fresh Elections
Very clearly and enough to perturb markets, Marine Le Pen’s far-right National Rally victory was the big story after its strong performance persuaded President Macron to call snap parliamentary elections. While the timing of this decision was a surprise, the probability of it occurring sometime this year was high as Macron has no outright parliamentary majority. The worry is that with National Rally having won won 32 of the vote, compared to Macron’s 15 vote share, the far right may be poised to effectively take over as government. But the two-stage nature of the parliamentary election (first vote on June 30 and then the run-off on July 7) makes this unlikely - despite Le Pen’s strong performance at the 2022 presidential election, her party remained a distant third in parliament with 17.3% of votes and 89 seats. Most likely, Macron’s party will remain the largest parliamentary party but will emerge weakened. As a result, this would lessen Macron’s already fragile ability to force through some difficult structural and fiscal reforms, adding to already-growing debt sustainability questions.
Admittedly, the government, even as a minority has options, most notably to use the article 49.3 procedure further, having used this constitutional tool to pilot through both the 2023 and 2024 budget laws, which allows finance and social security bills to go ahead without a parliamentary vote. This may lead to further motions of no-confidence against the government; recent such attempts saw none succeed but with a slimmed down parliamentary showing Macron may be more vulnerable ahead. As a result, what Macron may try and do more to legislate reforms with the support of opposition parties which he has done in the recent past such as the France Travail reform last October, and the reform of unemployment benefits done last November..
*) Rather than the national political parties, there are instead political groupings within the parliament. The five largest are the European People's Party Group (EPP), the Progressive Alliance of Socialists and Democrats (S&D), Renew Europe (previously ALDE), the Greens/European Free Alliance (Greens/EFA) and Identity and Democracy (ID).