As anticipated, the political gravity in the European Parliament has shifted to the right, at the expense of centrist liberals and the left-leaning Greens
Nevertheless, a pro-EU coalition comprising traditional centre-left and centre-right political groups is expected to remain the driving force behind the European Parliament's policymaking process.
However, it is now feasible – for the first time in the history of the European Parliament – that a slim, right-of-centre voting majority could be established, though coordination of such a coalition would be rare and fraught with political challenges.
As such, rather than in Brussels, the biggest impact of the election has been felt in France where President Macron called a snap parliamentary election following the heavy defeat of his centrist coalition by the far-right Rassemblement National.
While the full impact of the European Parliament election on the EU’s policy agenda can only be truly assessed once the political layer of the European Commission has been formed later this year, it is possible to draw some initial policy conclusions, including in the areas of:
The European Parliament is a directly-elected EU body with legislative, supervisory, and budgetary responsibilities. It serves a five-year term and plays an important role in the passing of EU laws and in electing the European Commission President, vetting EU Commissioner-designates, and approving the European Commission’s collective political leadership.
The 2024-2029 European Parliament will comprise 720 MEPs representing 27 Member States. MEPs are generally grouped with counterparts from other Member States in line with their political affiliations as follows (from left to right on the political spectrum):
The projected composition of the 2024-2029 European Parliament in order of representation is as follows1:
Political group |
2019 EP 705 seats |
Proj. 2024 EP 720 seats |
Change in seats |
Proportion of 2019 EP |
Proj. proportion of 2024 EP |
|---|---|---|---|---|---|
The European People’s Party (EPP) |
177 |
189 |
+12 |
25.1% |
26.3% |
The Progressive Alliance of Socialists and Democrats (S&D) |
140 |
136 |
-4 |
19.9% |
18.9% |
European Conservatives and Reformists (ECR) |
68 |
83 |
+15 |
9.6% |
11.5% |
Renew Europe |
102 |
74 |
-28 |
14.5% |
10.3% |
Identity and Democracy (ID) |
58 |
58 |
– |
8.2% |
8.0% |
The Greens/European Free Alliance (EFA) |
72 |
51 |
-21 |
10.2% |
7.1% |
The Left in the European Parliament (GUE/NGL) |
37 |
39 |
+2 |
5.2% |
5.4% |
Independent / unaffiliated / affiliation not yet confirmed |
51 |
90 |
+39 |
7.2% |
12.5% |
Total |
705 |
720 |
+15 |
As pre-election polls suggested, the political gravity in the European Parliament has shifted to the right, with the centre-right EPP and ECR groups gaining at the expense of the centrist Renew Europe group and the left-leaning Greens2. The ECR group is now projected to be the third largest group in the European Parliament, overtaking Renew Europe.
Nevertheless, a centrist, pro-EU coalition of the EPP, S&D, and Renew Europe, with an anticipated 399 seats amounting to a workable majority (though this may change as more as yet unaffiliated MEPs confirm their political allegiances), is expected to remain the driving force behind the European Parliament's policymaking process.
As per the previous European Parliament, a voting majority can also be achieved between the EPP, S&D and either of the Greens (although slim) or the ECR, or supermajority arrived at where the EPP and S&D groups garner the support of more than one of those three groups.
However, with the European Parliament shifting to the right, it may now be possible – for the first time in the history of the European Parliament – that a slim, right-of-centre voting majority could be assembled between the EPP, ECR, ID, and right-leaning unaffiliated MEPs (assuming at least 35% of unaffiliated MEPs are right-leaning3), though significant obstacles to coordinating such cross-group consensus are likely given the various groups’ disparate political views.
So, while the political gravity in the European Parliament has indeed shifted to the right, the day-to-day impact on the European Parliament's policymaking process is expected to be relatively muted, with the most likely impact being a more business-friendly approach to the EU’s climate and sustainability agenda (e.g., a more pragmatic approach to climate transition under the European Green Deal).
Arguably, the most significant outcome of the European Parliament election is not how policy will be made by EU institutions in Brussels, but how the electoral result in France motivated President Emmanuel Macron to call a snap parliamentary election following the heavy defeat of his Renaissance party (which forms part of a centrist coalition, Besoin d’Europe) by the far-right Rassemblement National.
Rassemblement National received almost one third of the French popular vote, on a turnout of 51.5%, representing 30 of France’s 81 seats in the European Parliament, more than double that of Besoin d’Europe which received 14.6% of the popular vote and only 13 parliamentary seats.
The French electorate will therefore go to the polls again on 30 June and 7 July to vote for their representatives in the Assemblée Nationale, with President Macron hoping that the results of the European Parliament election will not be repeated. However, with Rassemblement National leading the early polling for the first round of voting5, the prospect of ‘cohabitation’ – or divided government – looms over the campaign.
German voters turned out in record numbers for the European Parliament election (voter turnout was 64.8%), dealing the coalition government a significant electoral defeat in the process. Chancellor Olaf Scholz’s Social Democratic Party (SPD) finished third with 13.9% of the vote (and 14 of the 96 German seats in the European Parliament), significantly behind the centre-right alliance of the Christian Democratic Union (CDU) and the Christian Social Union (CSU).
The CDU/CSU alliance received 30% of the vote – a boon for the incumbent President of the European Commission, Ursula von der Leyen and her political allies – winning almost one third of German seats in the European Parliament. Notably, the far-right Alternative for Germany (AfD) polled second with 15.9% of the vote – or 15 seats – leading political commentators to question whether the German government, which has so far pushed back, will call a snap election.
The Italian government performed far better in the European Parliament election than its French and German counterparts, with Prime Minister Giorgia Meloni’s Fratelli d’Italia (FdI) winning 28.8% of votes, equating to 24 MEPs; almost one third of Italy’s representation in the European Parliament. It is expected that Meloni will look to use this continued electoral support as a means to exert greater influence at an EU level, potentially securing stronger cooperation with the centre-right EPP in exchange for her group’s (the ECR) support for Ursula von der Leyen’s candidacy for re-election as President of the European Commission. The centre-left Partito Democratico (PD) came second in the Italian European Parliament election, winning 24.1% of the vote and 21 seats.
The centre-right Popular Party (PP) pipped Prime Minister’s Pedro Sanchez’s Socialist Party (PSOE) to first place in the European Parliament election, with 34.2% of the vote (22 out of 61 seats) to 30.2% (20 seats) respectively. The PP’s electoral success means that it will become the second largest party within the European Parliament’s largest political group, the EPP, a significant change from the 2019-2024 legislature which brings significant influence. Similarly, the PSOE remains the second largest party within the S&D group. Two of Spain’s populist parties, Vox and The Party is Over (SALF), collectively garnered 14.2% of the popular vote, equating to 9 MEPs.
The centre-right Popular Party (PP) pipped Prime Minister’s Pedro Sanchez’s Socialist Party (PSOE) to first place in the European Parliament election, with 34.2% of the vote (22 out of 61 seats) to 30.2% (20 seats) respectively. The PP’s electoral success means that it will become the second largest party within the European Parliament’s largest political group, the EPP, a significant change from the 2019-2024 legislature which brings significant influence. Similarly, the PSOE remains the second largest party within the S&D group. Two of Spain’s populist parties, Vox and The Party is Over (SALF), collectively garnered 14.2% of the popular vote, equating to 9 MEPs.
The full impact of the European Parliament election on the EU’s policy agenda can only be truly assessed once the political layer of the European Commission has been formed (as approved by the European Parliament) and its ambitions set. Nevertheless, it is possible to draw some initial conclusions from the European Parliament’s notable shift to the right and the related demise of the Greens, as follows:
At the very least, a period of regulatory consolidation (also referred to a regulatory pause) is expected in the area of climate and sustainability policy, with a greater emphasis placed on thorough impact assessments where the existing policy framework is revised or, in time, extended.
However, the ambitions of the European Green Deal are expected to be reframed, likely with an industrial tilt, rather than overhauled. This could imply less political rhetoric on pure emissions reduction, though net-zero targets will remain in place, and more of a focus on security of energy supply and rebalancing industrial competitiveness vis-à-vis jurisdictions such as the US and China.
Recent progress towards implementing an EU defence industrial strategy is expected to be accelerated with broader support within the European Parliament. Beyond greater coordination in European production and procurement, following the election, there is now more support in Brussels for developing common capabilities, such as an EU air defence system.
This proposal has already been championed by Polish Prime Minister and former President of the European Council, Donald Tusk, whose influence has been further strengthened by strong European Parliament election results, and supported by President of the European Commission, Ursula von der Leyen, who is currently frontrunner for re-election by MEPs later this year.
With economic growth in the EU severely lagging the US and China, policies which enhance the bloc’s global competitiveness will likely be prioritised in the 2024-2029 political cycle with the support of a more right-leaning European Parliament. The EU has already signalled its intention to reduce the administrative burden on domestic businesses relative to other jurisdictions, but right-leaning MEPs will hope to go further than the European Commission’s initial proposal to reduce business reporting requirements by 25%6, for example by rationalising, if not halting, the development of any new rules for small businesses7.
The EU recently agreed a Pact on Migration and Asylum which aims to build a common EU system for managing migration. Despite having been enacted earlier this year, all of the right-leaning political groups in the European Parliament included in their manifestos further strengthening the EU’s common border, tackling illegal immigration, and overhauling European asylum law. It is therefore expected that the right of the European Parliament will closely scrutinise the effectiveness of the new Pact on Migration and Asylum and seek to implement changes where it deems the EU’s current approach falls short.
Deregulation and tax cuts could potentially provide a boost to US economic and market growth, while tariffs and immigration restrictions could pose challenges.
The potential for significant deregulation and tax cuts has excited many investors, leading US stocks to “climb the wall of worry” despite immigration and tariff risks.
We expect significant monetary policy easing to push global growth higher in 2025, fostering an attractive environment for risk assets as central banks achieve a “soft landing.”
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1 Source: European Parliament, 24 June 2024
2 It should be noted that the political affiliation, if any, of around 50 newly-elected MEPs is still to be confirmed. The number of seats provisionally assigned to each parliamentary group is therefore subject to change.
3 A pre-election analysis from the European Council of Foreign Relations (ECFR) suggested a majority of unaffiliated MEPs in the previous legislature were right-leaning – assuming at least 51% of such MEPs are right-leaning, based on the above voting data, a right-of-centre coalition would have 375 seats; above the necessary 361 seats required for a majority. However, a pre-election poll from Ipsos classified 41% unaffiliated MEPs as right-leaning – based on the above voting data, this would leave a right-of-centre coalition with a simple majority of four MEPs. It remains to be determined how the c.83 as yet unaffiliated MEPs in the 2024-2029 European Parliament will be classified in terms of their position on the political spectrum.
4 Source of data relating to key Member States in the box (unless otherwise stated): European Parliament, 24 June 2024
5 Source: Politico, 21 June 2024
6 Source: European Commission, March 2023
7 Source: European Conservatives and Reformists (ECR) 2024 Manifesto.
The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations) and investors may not get back the full amount invested.
All data as of June 13th, 2024, unless otherwise stated.
Views and opinions are based on current market conditions and are subject to change.
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