European elections and Macron’s cabinet reshuffle
But also — OpenAI and Microsoft, Defence, and Trump
Hello! It’s Tuesday 16th January, and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on Twitter and LinkedIn.
The Briefing
On January 11, MEP Stéphane Séjourné was appointed Minister of Europe and Foreign Affairs by Emmanuel Macron as part of a cabinet reshuffle.
Up until now, Stéphane Séjourné had been considered the future lead candidate for the Renaissance party in the European elections. His departure, just a few months before the elections, leaves this position vacant, at a time when European liberals are struggling in the polls.
DEPARTURE • Just a few weeks ago, Stéphane Séjourné was still saying he was ready to be the leading candidate for Renaissance in the June 2024 European elections. "I want to lead the battle," he said in an interview with Politico at the end of November 2023.
His appointment as Minister of Europe and Foreign Affairs is a game-changer. Renaissance will need to find a new personality to lead its list for the European elections, someone that must also be to the liking of the other parties in the government’s coalition (known as Ensemble), including the Horizons and Mouvement démocrate (MoDem).
While several names are circulating, such as Clément Beaune, Olivier Véran, or Pascal Canfin, it is unlikely that an announcement will be made before the entire government is unveiled, including the identities of the state secretaries and some deputy ministers.
RENEW • Stéphane Séjourné's departure comes at a crucial moment. Polls on European election voting intentions suggest that Renew Europe (liberals), the political group to which Renaissance belongs — and which is chaired by Stéphane Séjourné —could lose around twenty seats in the European Parliament.
Currently the third-largest political force in the European Parliament behind the European People's Party (EPP, centre-right group) and the Socialists and Democrats (S&D, centre-left group), Renew risks being overtaken by the far-right Identity and Democracy (ID) group, of which the National Rally (formerly known as National Front) is a part.
Various polls suggest that ID could make a significant breakthrough in the elections and gain around twenty seats in the European Parliament.
BALANCES • A few days before his appointment, Stéphane Séjourné expressed concerns to journalists about this. "We have a collective responsibility to convince citizens that there are other alternatives to extremism," he declared at the beginning of January.
The President of Renew is essentially worried that a rise of the far right could disrupt political balances within the European Parliament.
Since 2019, the "grand coalition" between the EPP, S&D, and Renew has been central to parliamentary activity in the European Parliament. This coalition is not set in stone: “instead of a coalition imposing itself for the entire legislature, various coalitions on different subjects are observed," summarise the authors of a report from the Group of European Studies.
Although it will likely maintain its majority after the upcoming elections, the coalition could be weakened. In recent months, it has also faced internal divisions over environmentally ambitious texts, on which the EPP found support from the Conservatives and Reformists (CRE, a right-wing group with factions from the centre-right and far-right) and ID.
The rise of the far right could shift the centre of gravity of the Parliament to the right and potentially strip Renew of its role as a mediator in the centre of the European political spectrum. In such a scenario, the influence of the EPP would be strengthened.
FRANCE • In France, a poll by research group Elabe from January 13 predicts the National Rally (RN) as the big winner of the elections with 28.5% of the vote intentions.
According to the same poll, Renaissance would gather 18% of the votes. The Socialist Party (PS), Europe Ecology-The Greens, France Unbowed, and The Republicans (LR) are neck-and-neck, ranging between 7.5% and 9.5% of the vote intentions.
Renaissance will need to find its lead candidate quickly as the campaign will start earlier than in 2019. Jordan Bardella has already announced that he will hold his first campaign rally as the lead candidate of the RN on March 3 in Marseille. Renaissance is expected to hold its first rally on the same date.
PERSPECTIVES • As the President of Renew, Stéphane Séjourné has been a means for Emmanuel Macron to strengthen his influence in the European Parliament.
His absence may create a gap within Renew in the post-election period, during which major political groups negotiate to allocate several key roles, such as the presidents of various parliamentary committees, the President of the European Commission (subject to Parliament approval), and the various European Commissioners (also subject to Parliament approval).
His absence "will create a vacuum in Renew," explains a representative from another political group to Politico. "Séjourné would have been extremely important after the election. Now he’s jumped ship," he adds.
In Case You Missed It
COMPETITION • On January 9, the European Commission announced that it would examine the nature of the partnership between the multinational Microsoft and the company OpenAI (which developed ChatGPT) to determine whether this relationship should be investigated under the EU Merger Control Regulation.
Several elements could lead the Commission to consider that this partnership resembles a merger, including Microsoft's $13 billion investment in OpenAI, its status as the exclusive provider of OpenAI's cloud services, its rights to a capped share of OpenAI's profits, and its position as an observer on OpenAI's board of directors (a position obtained after Sam Altman's brief stint at Microsoft in November 2023).
On the same day, the Commission also launched two calls for contributions and requests for information on the state of competition in the virtual worlds and generative AI sector. The Commission aims to examine the nature and impact on the market of certain agreements between major players in the digital market and generative AI providers — to assess the risk of innovation capture by a small number of dominant companies.
The Commission also called on stakeholders to provide their views on how EU competition law should adapt to maintain competitiveness in the virtual worlds and generative AI markets.
These announcements come a month after the UK Competition and Markets Authority (CMA) called for contributions on the Microsoft-OpenAI partnership.
DEFENCE • On January 9, Thierry Breton, the European Commissioner for the Internal Market (also responsible for defence), announced his intention to create an ambitious European defence fund of €100 billion to significantly increase the "European defence industrial base."
This proposal precedes the presentation in late February by the Commission of a new European Defense Industry Strategy (EDIS) and a new fund (EDIP) aimed at strengthening the production and acquisition capacity of weapons for several countries on the continent, while encouraging cross-border cooperation.
Currently, member states do not invest enough in their defence industry and army compared to their commitment as NATO members (only 1.5% of GDP compared to the required 2%, according to the European Defence Agency in 2022).
Doubts persist about the EU's ability to fulfil its goal of providing Ukraine with one million shells by spring, illustrating the weaknesses of the European defence industry.
Thierry Breton will have to convince member states of the relevance of such a fund and its ambitious amount during the extraordinary European Council on February 1, 2024 — where European leaders will again attempt to agree on an additional €50 billion in aid to Ukraine.
TRUMP • The possibility of Donald Trump's return to the White House raises many concerns in Brussels. In an interview on France 2 on January 11, Christine Lagarde warned of the threat that this potential return represents. "If we have to draw lessons from history — that is, how he led the four years of his mandate — he is cleary a threat," said the President of the European Central Bank.
On January 9, during an event at the European Parliament, Thierry Breton revealed the words that Donald Trump would have spoken during a meeting at the World Economic Forum in Davos in 2020. "You must understand that if Europe is attacked, we will never come to help and support you. (...) NATO is dead, we are leaving NATO," the former President of the United States allegedly declared to the President of the European Commission during this meeting.
Beyond the fear of a weakening of NATO in the event of a US departure, there is also uncertainty about Donald Trump's willingness to support Ukraine, which worries Brussels. He oscillates between promises to "give them more than they have ever had" and threats to cut aid to Kiev.
The European Union has a little over a year to put up safeguards and try to prepare for a reelection with a non-negligible probability.
What We’ve Been Reading
In Transitions, Martin Ehl draws attention to the opportunism which he sees as a major driver of Central European capitals’ foreign policy.
This edition was prepared by Augustin Bourleaud, Guillaume Renée, Luna Ricci, Lucie Ronchewski, Maxence de La Rochère and Hana Rajabally. See you next week!