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The New European Parliament: Pro-EU but Highly Fragmented

Between 23 and 26 May 2019, the people of Europe voted to elect the composition of the new European Parliament, which will begin its work on 2 July 2019. Notably, pro-European minority groups have scored significant gains at the expense of the two largest parties in the assembly. Populist (far right) parties have also gained more seats, although predictions over a vast increase in their influence did not materialise.

After the European parliamentary elections, concerns about the potential influence of Europe’s populist parties were largely mitigated. While they made some gains, populists were denied the major victory that their supporters had predicted and others had feared.

A respected European think-tank, the European Council on Foreign Relations (ECFR) stated in its post-election analysis that “contrary to predictions, there has been no continent-wide shift to far-right or anti-European parties.” The ECFR is reported to have said that in Germany, Denmark, Spain, Austria and the Netherlands the far-right “performed badly.” In 23 out of 28 Member States, the election was won by a pro-European party and smaller pro-European parties were the main beneficiaries from a surge against the anti-European parties in Denmark, the Netherlands, Austria and Germany, the ECFR has pointed out. That being said, there were big gains for some populists, such as the Brexit party in the UK, as well as in France, Italy and Hungary.

Thus, following a voter turnout of over 50%, the highest since 1994, pro-European parties remained dominant and won the ideological battle. This has given an important signal for the development of the EU in the near future, considering that the European Parliament has a binding say over most areas of policymaking, including trade deals.

At the same time, the new European Parliament will be more fragmented, and prospects regarding the smooth or efficient negotiation and conclusion of trade agreements over the next five years are thus not promising. It appears that the winning centre-right European People’s Party (EPP), which has been a strong proponent of free trade, will have difficulties in building a controlling majority. Its strength in the Parliament decreased, as voters granted the EPP 180 seats out of the total 751, as compared to the 221 seats it held during the previous mandate. In a similar fashion, the second largest group – the centre-left Progressive Alliance of Socialists and Democrats (S&D) – will have 145 seats instead of the previously held 191. This will enhance the influence exerted by smaller groups, given that the EPP and the S&D will no longer be able to dominate the chamber together in any legislative process.

On the other hand, ALDE (the Alliance of Liberals and Democrats for Europe) and the Greens achieved solid gains at the parliamentary elections: ALDE will have 109 seats (previously 67) while the Greens increased their share to 69 from 50. The role of their members of Parliament (MEPs) in the formation and implementation of the agenda of the next European Commission is thus expected to be crucial, given that any parliamentary majority which would not include either group would appear unstable and vulnerable to internal conflicts.

Furthermore, the progress of the green parties in several Member States, including Germany and France, did not remain unnoticed. In Germany, “Die Grünen” received 21% of the votes and almost doubled their seats, with only the Christian Democrats of Angela Merkel winning more. France’s Green Party saw a surprising surge in support as well, finishing in third place with 13.1%. This has given rise to comments about an emerging “green wave” in Europe, which could alter the priorities of the next European Parliament. Hong Kong sellers may even see an increase in new environmental legislation affecting the placing on the market of commonly sold consumer goods, e.g., a future law to reduce waste from textiles (which is expected). A recent example of meaningful environmental legislation which has already been adopted, earlier this year, is the EU Directive regulating single-use plastics.

There may also be an increase in enforcement actions wh ere environmental laws already exist, but have not been properly applied by Member States or economic operators.

As a result of the declining influence of big parties and the gains made by non-populist minority groups, it is anticipated that the EU’s trading partners will face more stringent demands from the European Parliament in the context of trade negotiations. Members of both the ALDE and Green parties have, for example, declared their support for a more determined EU climate policy. Importantly, leading candidates from the list of the French ruling party “La République En Marche” have stated that they would oppose trade deals with countries that have not embraced the Paris Agreement on Climate Change, such as the United States.

Demanding other environment-related requirements from trading partners is also distinctly possible, it has been reported. According to the EU press, such conditions could, for instance, be related to the introduction of technology transfer clauses which would enable developing countries ameliorate their environmental standards or lead to the establishment of a greenhouse gas emissions trading scheme.

In addition, the alignment of labour standards could also be prioritised over market opening.

It has, moreover, been commented upon that certain policy shifts in the S&D and ALDE groups could foster the adoption of a somewhat more protectionist stance in the European Parliament. This could be expressed, for example, by the insistence on possibilities for the EU to impose safeguard measures in certain situations under newly concluded trade pacts, or on enhancing the EU’s monitoring of trade agreements.

Currently, the Union is negotiating trade deals with Australia, New Zealand, the Mercosur members (Argentina, Brazil Paraguay and Uruguay), Chile and Mexico, among others, while negotiations with Vietnam and Singapore are said to have concluded.

In spite of a fragmentation resulting from the recent elections, it is important to note that, broadly speaking, the new European Parliament is expected to sustain its support for free trade.

Content provided by Picture: HKTDC Research
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