Europe faces political uncertainty but urgent priorities

The less-than-expected victory by far-right parties in the European parliamentary elections produced a collective sigh of relief all over the continent. But their share of votes rose in 21 countries, making them the biggest party in Austria, France, and Italy and the second biggest in Belgium, Germany, and the Netherlands. Even if their influence will still be limited, the result was enough to make Vladimir Putin smile.

In the plenary of the European Parliament, nearly 200 political parties in different groups must now form alliances to try to amass a majority, a process that could take weeks. The far right is divided into two groups, but there are also so called “groupless” members with limited access to parliamentary resources. Whether the far-right parties (and some on the far left) find a home in an existing group, form a new one, or remain outside the system remains to be seen. They generally have had difficulty working together in the past.

The far right is united by a joint climate skepticism, an “anti- woke” agenda, and policies that are anti-immigrant and pro Russia, with the notable exception of Prime Minister Giorgia Meloni of Italy, who has been very clear on her support for Ukraine. They generally despise “globalists” and Europe’s “establishment.”

What will the impact be?

The most immediate task for the Parliament will be to confirm the designation by the heads of state in the European Council of the president of the European Commission. The Council will most likely make its selection in July and will most probably choose Ursula von der Leyen of Germany again. Assuming she is selected, von der Leyen will then need 361 votes in the parliament. She faces a dilemma over whether to forge a mandate in the pro-European center, as she did previously, or work with the slightly more moderate right in the European Conservative and Reformist Party in order to get a broader majority. Once the Commission president is confirmed, she will form her team in close dialogue with member states, each of which nominates a commissioner. The candidates will then be scrutinized in public hearings by the different parliamentary committees and hopefully confirmed and able to start working in December.

A long to-do list for Europe

Europe is facing formidable challenges. Some of them are internal, such as addressing the issue of growth, productivity, competition, and innovation, where the continent is far behind the United States and China. This goal will require reforms and modernization of the internal market, probably in line with the two reports drafted by former Italian prime ministers Enrico Letta and Mario Draghi. The way forward will also require more focus on innovation and research, while making sure that the recently adopted Artificial Intelligence (AI) Act is applied in a way that does not hamper innovation but promotes the benefits and possibilities of AI. All these objectives require legislation fully involving the European Parliament.

A separate internal matter has broader implications. The election campaign was rocked by farmers’ protests in the streets of many capitals. Some protest movements are allied with the extreme right parties, while other are just showing their fear of unfair foreign competition and the complicated, costly, and time-consuming bureaucracy overseeing many new climate laws governing pesticides and other issues. One can expect a slowing down of new initiatives and a focus on implementation and simplification of rules.

Europe in an increasingly hostile world

In a world of geopolitical rivalry and supply chain vulnerability, there is a need for a strong European leadership. In these areas, the European Parliament is less involved. The continued support for Ukraine and the security situation is the main priority for Europe. How can Europe continue to support Ukraine economically, politically, and military – also if Donald Trump returns to the White House? This will require more money and continued determination. Many in Europe also fear less American engagement in NATO, leading to a discussion on how Europe can take a stronger role in its own security and defence.

Furthermore, Europe needs to prepare for escalating trade wars and new tariffs from the United States if Donald Trump returns to the White House. But guarding against Trump is not the only trade concern. The Commission just proposed punitive tariffs on Chinese electric vehicles and will need to find a balance between being tough on an increasingly aggressive China, while maintaining important trade relations and carefully treading on a path to reduce the risk of depending on unreliable supply chains, a strategy labeled derisking as opposed to decoupling. The weakness of the World Trade Organization and the risk of accelerating trade wars should encourage Europe to expand the network of free trading partners, but the political mood after the elections is rather pointing towards more protectionism and strategic autonomy. With the strong position of the extreme right in Austria, France, and the Netherlands, it is unlikely that the EU-Mercosur free trade agreement with Latin American countries gets ratified.

A weakened Franco-German axis

More important than the composition of the European Parliament is the leadership and actions of the EU member states. The strong victory for the National Rally (Rassemblement National or RN) in France prompted President Emmanuel Macron to dissolve the national parliament and schedule elections on June 30. The French national voting system is different from the European Parliament system– and it is a gamble that might work – but it is also possible that the young Jordan Bardella from the RN could become prime minister. This would create a complicated “cohabitation” with Macron, whose presidential term lasts until May 2027. The president will remain responsible for foreign policy, including support for Ukraine, irrespective of the election results. But Macron will need his own parliament and the European parliament to pass budget measures.

The elections have severely weakened Germany. Chancellor Olaf Scholz’s humiliating defeat, along with his coalition partners, the Greens and the Liberals, creates an opening for the right wing. Many local elections are due this fall in regions where the far right Alternative für Deutschland is strong. The chancellor has ruled out extraordinary elections of the sort ordered by Macron. The risk is that he will remain a wounded leader for the rest of his mandate, another 18 months. Europe would then be facing an enfeebled Franco-German axis for some years, with adverse consequences for Europe and the rest of the world. Such weakness risks slowing down important reforms, on innovation and competition, on foreign policy, and the preparations needed for the enlargement. Other strong leaders who might try to fill the gap are Donald Tusk and Prime Minister Giorgia Meloni of Italy, who has emerged as the G7 leader enjoying the strongest political support at home.

Despite the cloud of political uncertainty surrounding European governance, Europe cannot afford long institutional fights and a leadership vacuum. Hopefully the European Commission will be in place by the end of the fall and in the meantime, Commission President von der Leyen´s caretaker team can deal with Ukraine while not proposing new legislation. Europe is facing increased skepticism over Ukraine, a probable slowdown on climate policy, and a reinforcement of protectionist views, even if the traditional center still dominates. A dysfunctional Franco-German axis risks slowing down needed reform and internal dynamics. It is still too early to fully judge the full long-term effects of the European parliamentary elections. But at least European politics is never boring.