The EU in 2024-29 - what a shift to the right means for business

The 2024 European Parliament elections largely concluded as expected. The results saw a significant, but not massive surge of right-wing nationalist parties from 20% to 25% of the EP’s seats. The centrist majority of pro-EU groups, dominated by the centre-right EPP, has shrunk, but eventually held. While current Commission President Ursula von der Leyen is poised to be nominated for a second term, she has a complicated path toward re-election in the Parliament. Regardless of the outcome of the race for top jobs, the European elections’ results will have a significant impact on policymaking in the EU in the upcoming mandate, complicating consensus-building and leading to greater uncertainty for businesses that operate in Europe.

Beyond politics: what is the impact for businesses?

While the European far-right may not be able to form a majority in the Parliament with the EPP or partake in the distribution of top jobs, their impact on the next cycle of EU policymaking will be visible, with significant consequences for businesses operating in Europe. The difficulties that von der Leyen may face in her re-election bid are the epitome of the wider political uncertainty that is likely to dominate the European political scene in the next five years. With greater fragmentation and polarisation within both the Council and Parliament, and the absence of a clear and cohesive majority, policymaking will prove more complex and time-consuming, especially on controversial issues that right-wing parties have traditionally opposed, like ambitious sustainability policies or fiscal discipline. This uncertain outlook for businesses could be worsened by growing political instability within certain member states.

The leaders of both France and Germany are weak. The sputtering Franco-German engine presents an opportunity for right-wing leaders like Italy’s Meloni to translate a growing electoral support into influence over the EU’s policy agenda. Moreover, Spain’s Pedro Sánchez could decide to return to the polls if his weak parliamentary majority hinders the adoption of next year’s national budget. Even if parties on the far-right of the political spectrum fail to re-organise effectively, the overall shift to the right will likely result in the EU adopting a more protectionist “Europe First” approach, in line with the recent shift towards strategic autonomy” and “economic security. Nationalist heads of government and MEPs are also likely to oppose greater centralisation of power at the EU level, for example on defence, or any further deepening of the Single Market, including a Capital Markets Union.

Lastly, as economic competitiveness emerges as a central focus for the next Commission, a more right-leaning Parliament is likely to align with Member States' calls for a "regulatory pause," especially in sectors that witnessed intense legislative activity during the previous mandate. However, proposing new legislation remains the Commission's core purpose, and lawmakers will be eager to leave their mark on the EU's rulebook, potentially leading to an uptick in legislative initiatives as the mandate progresses. Overall, businesses will need to adapt their engagement strategies to deftly navigate this shifting political terrain, where EU rulemaking continues amidst heightened uncertainty and a growing constellation of diverse actors vying for influence over the policymaking process.

Giacomo Borsetti is a consultant based in Brussels. At Flint, he works in a range of sectors with a focus on digital policy. This blog post was written with input from Brussels-based Manager Pepe López-Rúa Taboada and Partner & MD Europe Gregor Kreuzhuber. To find out more about how Flint can help you navigate the risks and opportunities of these developments, get in touch.

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