Here Are The Key Takeaways From The EU Elections

Courtesy of DB's European analysts Marion Muehlberger and Ursula Walther, here are the key takeaways from this weekend's EU elections.

Summary:

• The two main take-aways of the election results are (1) the centrist majority in the European parliament is holding as the the right did not outperform and (2) the biggest impact could be at the national level with Macron calling a legislative election.

• Centrist majority holds with 56% of total votes – EU likely to continue to run a centrist policy course. As widely, centrist parties have kept their majority. This means that the EU legislative process on future policy priorities (defense integration, boosting competitiveness) is unlikely to be hampered in the next 5-year legislative term. However, the shift to the right in the EP (all right-wing parties winning 22% of total votes) is likely to have some impact on the policy debate and could influence the shape of new legislation in policy areas like migration and the Green Deal.

• Von der Leyen (VdL) likely to remain head of the EU executive, but parliamentary confirmation vote could remain tight. EU leaders are likely to formally nominate VdL for the next Commission presidency on June 27-28, not least as the majority of EU leaders are from her party group. The subsequent parliamentary vote (now likely to happen on July 18) still looks tight and will probably require some deft negotiating (e.g. programmatic concessions, tactical alliances).

• Same voter turnout as in 2019 – no further Europeanisation of politics. Voter turnout remained steady at 51%, which suggests that a majority of the electorate does not consider EP elections to be second-order events. However, heightened geopolitical uncertainty did not mobilize more voters and raise awareness for EU-level action needed to solve current challenges around security and industrial competitiveness.

• Further insights into policy priorities expected in mid-July when VdL (or another candidate for Commission presidency) will present her/his new work program to the EP. Given headline concerns, it is likely to be centered around the priorities of competitiveness , security & defence and enlargement and common financing thereof.

• Macron dissolves parliament and calls early elections on June 30 for round 1 and July 7 for round 2. Macron’s Renaissance party suffered heavy losses in the EP elections and he dissolved parliament yesterday night. Macron himself will stay in office as president. Domestic government stability in other major eurozone economies is unlikely to be affected by the elections (despite the electoral defeat of Scholz's SPD).