The European Union has voted Is a change of policy coming to Europe?

I.

The citizens of the European Union elected a new European Parliament from 6 to 9 June 2024. Overall, right-wing parties emerged stronger from the election. However, there was no pronounced shift to the right in all EU states except for France and Austria. In the Netherlands, Geert Wilders' Freedom Party made significant gains, but is not the strongest force. Even in Italy, there were largely only shifts in the right-wing camp. And in Germany, the AfD's gains are limited in terms of Germany as a whole, especially as the AfD was well above 20 per cent in the polls a few months ago.

However, the respective strengths of the political groups in the European Parliament are still open. It is still unclear whether the same national parties will join forces in the same political groups as in 2019, whether some completely new political groups will be formed and whether individual national parties will voluntarily choose to be non-attached or remain involuntarily excluded from political groups.

Shortly before the European elections, the AfD was excluded from the Identity and Democracy Group, of which Marine Le Pen's RN party is a member. Viktor Orbán's Fidesz party avoided expulsion from the EPP Group in 2021, but now wants to join the Group of European Conservatives and Reformists, in which the Italian brothers of Italian Prime Minister Meloni are members. Or could Le Pen, Meloni, Orban and the German AfD as well as the Italian Lega and the FPÖ and others also unite to form a single, joint group to gain concentrated political clout in the European Parliament? Or would it be better to skilfully split into two or three groups to influence other political forces and positions?

In the current political situation in the EU, it does not seem unlikely that clever group formations could enable selective cooperation on issues of migration or climate policy between right-wing parties and individual pro-European parties in the centre. Although the Christian Democrats, Social Democrats, Liberals and Greens have by far the majority in the new European Parliament, they represent different views and concepts on issues of migration, climate and economic policy. For this reason, the Christian Democrats and Liberals could work together with Meloni and perhaps also with Le Pen on individual issues if it is clear from the outset that right-wing extremists such as Maximilian Krah and his AfD are kept out. Even an AfD purged of Maximilian Krah is likely to pose a major risk for Meloni and above all for Marine Le Pen.

Marine Le Pen will want to avoid anything that casts doubt on her distance from far-right positions and jeopardises her current electoral successes in view of the new elections to the French parliament on 30 June 2024 scheduled at short notice by French President Macron and the next presidential elections in France in 2027. And Meloni, who is firmly on the side of Ukraine and has withdrawn from the Silk Road agreement with China, is unlikely to feel comfortable in a joint parliamentary group with the pro-Russia and pro-China AfD and Viktor Orbán.

This means that a change of policy in the European Parliament on issues of migration, climate and economic policy is most likely if Meloni and Le Pen keep the right-wing extremists and the Russia and China fans at bay. This should be much easier for Meloni than for Le Pen.

To form a political group in the 720-member European Parliament, at least 23 MEPs are required, who must come from at least a quarter of the 27 EU member states. Between 2019 and the current European elections in 2024, there were 7 political groups in the European Parliament. Based on these groups, the provisional result of the elections from 6 to 9 June 2024 is as follows

II.

The European Parliament is the only directly elected body of the European Union and is re-elected every five years. It has legislative functions, budgeting functions, control functions and electoral functions.

The European Parliament shares the legislative function with the Council of the European Union (Council of Ministers). However, the European Parliament has no right of initiative for legislative proposals. This lies with the EU Commission. However, the EU Parliament can request the EU Commission to exercise its right of initiative in accordance with Art. 225 TFEU. Since 2010, the agreement has applied that the EU Commission must submit a draft law within 12 months or justify within three months because it does not wish to submit a draft law.

In most policy areas, the directives, regulations and decisions submitted by the EU Commission are discussed by both the Parliament and the Council of the European Union in two readings in accordance with Art. 294 TFEU, through which amendments can be made to the legislative text submitted by the Commission. If Parliament and the Council cannot reach an agreement, a conciliation committee is convened in the third reading.

However, this ordinary legislative procedure does not apply to all policy areas. In competition policy, for example, the European Parliament only must be consulted. In the common foreign and security policy, the High Representative of the EU for Foreign Affairs and Security Policy only must inform Parliament and should take due account of Parliament's views. In trade policy, however, the Parliament has the right to propose amendments to draft legislation and can reject the corresponding legal acts.

The European Parliament and the Council of the European Union also decide jointly on the EU budget (budgeting function). Amendments can be made to the budget submitted by the EU Commission. If there is agreement between the Parliament and the Council, the budget enters into force with the agreed amendments. In the event of differences, a complex procedure follows in accordance with Art. 314 TFEU, in which a conciliation committee can also be convened.

The European Parliament's control function extends to both the EU Commission and the Council of the European Union. In addition to questions, committees of enquiry and hearings, the European Parliament can, in accordance with Art. 234 TFEU, express its censure of the EU Commission. This requires a double majority of two thirds of the votes cast and a majority of the Members of Parliament. If the motion of censure is successful, the EU Commission must resign as a whole.

The electoral function of the European Parliament is to elect the President of the EU Commission on the proposal of the European Council (Council of Heads of State or Government). The Parliament has no right of initiative of its own. The entire EU Commission must also be confirmed by the Parliament. However, the Parliament can only confirm or reject the EU Commission as a whole. It has already happened several times that Parliament has forced individual candidates to withdraw after hearings of the proposed Commissioners by threatening to reject the entire Commission.

The results of the elections to the new European Parliament from 6 to 9 June 2024 should not affect the legislative, budgeting, control and electoral functions of the European Parliament. The pro-European centrist parties have a clear majority. Furthermore, if Meloni and Le Pen or their respective party colleagues in the EU Parliament consistently exclude the far-right on the one hand and the pro-Russia and pro-China parties on the other and favour pragmatic solutions and compromises over fundamental opposition, then new majorities in the European Parliament will also be possible, which could also prompt or force the European Council to make policy corrections.

Irrespective of this possibility, which is currently only a possibility, the outcome of the European elections is likely to have a significant impact on politics in individual EU member states. The greatest impact is already being felt in France, where President Macron has called new elections for the parliament on 30 June 2024. In Germany, the traffic light system has been punished. And in Hungary and Poland, pro-European forces are on the rise. Overall, we are dealing with a very mixed result.

Legal notice

The information contained and opinions expressed in this document reflect the views of the author at the time of publication and are subject to change without prior notice. Forward-looking statements reflect the judgement and future expectations of the author. The opinions and expectations found in this document may differ from estimations found in other documents of Flossbach von Storch SE. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. This document does not constitute an offer to sell, purchase or subscribe to securities or other assets. The information and estimates contained herein do not constitute investment advice or any other form of recommendation. All information has been compiled with care. However, no guarantee is given as to the accuracy and completeness of information and no liability is accepted. Past performance is not a reliable indicator of future performance. All authorial rights and other rights, titles and claims (including copyrights, brands, patents, intellectual property rights and other rights) to, for and from all the information in this publication are subject, without restriction, to the applicable provisions and property rights of the registered owners. You do not acquire any rights to the contents. Copyright for contents created and published by Flossbach von Storch SE remains solely with Flossbach von Storch SE. Such content may not be reproduced or used in full or in part without the written approval of Flossbach von Storch SE.

Reprinting or making the content publicly available – in particular by including it in third-party websites – together with reproduction on data storage devices of any kind requires the prior written consent of Flossbach von Storch SE.

© 2024 Flossbach von Storch. All rights reserved.