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May 22, 2019 | 09:00 GMT

9 mins read

European Parliament Elections Mark the End of EU Legislative Consensus

A pedestrian passes election campaign posters of the left-wing Die Linke and of the center-right German Christian Democrats on May 13, 2019, in Berlin.
(Sean Gallup/Getty Images)
Highlights
  • European Parliament elections will result in a more fragmented legislature, which will force the long-dominant two largest center-right and center-left parties to reach compromises with smaller forces to pass legislation.
  • A more fragmented parliament will slow the EU legislative process, and could kill legislation by diminishing the ideological alignment between the European Parliament, which represents EU voters, and the European Council, which represents EU governments.
  • This will lead to greater uncertainty about the policy direction of the European Union as investors, companies, financial markets and interest groups will find it harder to foresee the outcome of the legislative process.

Every member state of the European Union will hold elections from May 23 to 26 to select its representatives for the European Parliament, the bloc's Continental legislature. While not as prominent as other EU institutions, the parliament plays a significant role in shaping the bloc's policies. It is a co-legislator alongside the European Council, which represents EU member governments. But while the approval of each is required to pass laws proposed by the EU's executive arm, the European Commission, the European Parliament also appoints the president of the European Commission and his or her team of commissioners and approves the multiyear EU budget.

The Big Picture

Stratfor's annual and second quarter forecasts highlight the elections for the European Parliament as one of the most important political events in Europe in 2019, noting that the elections will result in a more ideologically fragmented parliament, a situation that will mirror political developments in many EU member states.

Approval by the European Parliament is required to pass the vast majority of EU legislation, including measures affecting agriculture, energy, immigration and health. In some issues, such as taxation, competition law and foreign policy, the institution has only a consultative role, with final say residing with EU national governments. In other areas, such as trade deals, the parliament can approve or veto, but not modify. And while the European Parliament can ask the commission to submit legislative proposals, it cannot propose legislation on its own.

Pre-election polling suggests that the vote will result in a fragmented and polarized European Parliament, with mainstream parties losing ground to smaller, formerly marginal forces. This will probably end the joint dominance of the center-right European People's Party (EPP) and the center-left Socialists and Democrats (S&D) party, which for years have had an informal alliance to jointly pass legislation. A more ideologically disparate parliament will force the EPP and the S&D to seek agreements with smaller groups, likely increasing the influence of relatively minor parties such as the centrist Alliance of Liberals and Democrats for Europe (ALDE) and the European Green Party. In the meantime, nationalist and Euroskeptic parties grouped in the European Alliance of People and Nations (EAPN) will likely improve their representation in parliament, but not by enough to give them much influence.

This graphic shows the main contenders for the European Parliament and the policy positions for each

The composition of the new European Parliament will affect the behavior of the European Commission in at least two main ways. To begin with, the new president of the commission will have to be approved by the European Parliament. This means that regardless of how the new commission president is chosen, a majority of lawmakers in the European Parliament must ratify the choice. At the same time, the new European Commission will have to keep in mind the ideological composition of the European Parliament when proposing legislation, because a more fragmented legislature could make laws harder to approve.

EU Integration

The ideological composition of the new parliament will help determine the policy direction of the European Union in the next five years. Four of the five political groups expected to win the most seats are supportive of Continental integration, albeit with notable caveats. The EPP and ALDE support expanding the EU single market through initiatives such as the capital markets union, a plan to further integrate Europe's capital markets; the energy union, a series of proposals to diversify Europe's sources of energy and deepen the cooperation on energy infrastructure; and the digital single market, a plan to move from national digital markets to one integrated EU market. The parties also have similar views on issues such as reducing bureaucracy in the European Union and eliminating red tape to facilitate investment.

But ALDE and especially the EPP are skeptical of policies that would increase financial risk sharing in Europe or that would lead to higher public spending in the bloc. This position differentiates these parties from the S&D, which wants a greater redistribution of resources within the European Union and defends the idea of fiscal transfers to reduce economic disparities between member states. According to the S&D, additional public spending in Europe should be financed through new levies such as a financial transactions tax, which would target transactions between financial institutions; and a digital tax, which would target large digital companies operating in the European common market. While parliament does not have authority over taxation, it can ask the commission to make proposals on that issue.

The Greens, for their part, defend European integration, stating in their electoral manifesto, "individual nations are not powerful enough." The party is a strong supporter of environmental policies, and it proposes to "fight climate change by phasing out coal, promoting energy efficiency and moving to 100 percent renewables." When it comes to taxation, the Greens propose to "develop tax regimes that do not continue to privilege large multinational corporations and wealthy individuals" and is critical of "unfair tax competition between member countries." The Greens' positions are radically different from those of the EAPN, which promises to defend the sovereignty of Europe's nation states and resists any policies that would deepen economic or political integration in Europe. The EAPN promotes the view that the European Union should be a club of nations that cooperate in areas of mutual interest, but not one where supranational institutions undercut national sovereignty.

Trade Agreements

The European Parliament can approve or reject trade agreements, but it cannot amend them. The EPP and ALDE support concluding free trade agreements (FTAs) with countries around the world while the S&D, and especially the Greens, are more skeptical. For its part, the EAPN tends to oppose them. As a result, the ideological composition of the new European Parliament could make ratification of new FTAs more difficult. It could also force the European Commission, which is in charge of FTA negotiations, to push for the introduction of issues such as labor rights and environmental issues in FTA negotiations to facilitate passage in the European Parliament.

The ideological composition of the new European Parliament could make it more difficult for the pan-Continental legislature to ratify free trade agreements.

The prospect of a trade agreement with the United States is particularly controversial in Europe. ALDE and EPP members have called for a trade deal with the White House, while the Greens have said that Brussels should not negotiate so long as Washington refuses to adopt the Paris Agreement on climate change. Most of the large parties want Brussels to increase pressure on China to open its market to European investors, but the idea of creating European industrial champions by merging EU companies into larger conglomerates to better compete with Chinese and U.S. giants remains divisive. The EPP has spoken in favor of them, but ALDE and the S&D fear they would create monopolies, raising consumer prices.

Immigration and Security

Immigration will be one of the chief topics of focus for the next European Parliament. The EPP, ALDE and especially the EAPN are the loudest supporters of stronger protection for external EU borders and the introduction of tougher immigration laws. These parties believe that the European Border and Coast Guard Agency (Frontex) should be given more resources. The EPP has also promised to turn the European Union Agency for Law Enforcement Cooperation (Europol) into "a European FBI" with joint investigative teams with a special focus on terrorism. The EPP, ALDE and EAPN hold similar views regarding idea that the European Union should address the issue before migrants even reach Europe by increasing cooperation with the countries where migrants originate from and transit through.

The S&D, in turn, takes a softer view of immigration, arguing that EU member states should cooperate more on the distribution of migrants within the bloc and proposing reforms to the Dublin regulation, under which the country where asylum seekers first enter the European Union is responsible for their asylum application. This reform has failed to pass thus far, with EU governments rejecting plans by the commission to introduce quotas of migrants under which each country would be assigned a quota of migrants regardless of where they arrive to replace the Dublin system. The Greens meanwhile have defended the right to asylum, calling for "legal and safe channels for migration" in Europe. With nationalist parties making gains across the European Union, the S&D and the Greens will struggle to make headway with their views on immigration.

A More Complex Legislative Process

The probable fragmentation of the next European Parliament will slow the legislative process in the EU — and add complexity. For decades, the informal alliance between the EPP and the S&D created some degree of stability in body, which allowed businesses, investors, financial markets and lobbyist groups to have a relatively clear view of the bloc's policy direction. The alliance between the EPP and the S&D also contributed to the marginalization of far-right and far-left political parties, which were almost irrelevant in the legislative process.

The probable fragmentation of the next European Parliament will slow the legislative process in the EU — and add complexity.

With the EPP and the S&D losing their joint majority in the Continental legislature and other parties gaining prominence, the certainties of the past will probably weaken. After the elections, the EPP and the S&D will likely have to look for compromises with parties like ALDE, which would move the European Parliament toward more conservative and business-friendly positions; but also with parties like the Greens, which would influence the parliament's position on environment-related legislation. Euroskeptic parties meanwhile will probably remain fragmented since nationalist parties belong to several different blocs in parliament, but their rise could influence the mainstream parties to move to more extreme policy positions. More seats in the European Parliament will also mean more visibility and additional financial resources for Euroskeptics.

Finally, a more fragmented parliament could create problems for the mechanism by which the parliament and the European Council make joint decisions. For an EU law to be approved, both must pass the identical text or the legislation fails. This has rarely happened, since the European Parliament and Council typically have compromised. But a more ideologically fragmented parliament could reduce the harmony between the branches. The next seven-year EU budget, which will enter force in 2021, could prove particularly contentious, especially over sensitive issues like agricultural subsidies and structural funds. At a time when political uncertainty is on the rise in most EU member states, it is only natural that the Continental legislature will mirrors that process and face uncertainties of its own.

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