Far Right Reaches Unprecedented Levels of Influence in European Parliament

But also — Trade, Competitiveness, AI, Taxation

Hello! Today is July 16th, 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. 

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The Briefing

A far-right MEP will be leading the European Parliament negotiations on the 2040 climate target.

2040 • On July 8, the political group Patriots for Europe — which includes MEPs from Jordan Bardella’s Rassemblement National and Viktor Orbán’s Fidesz — managed to secure the role of ‘rapporteur’ for the EU's 2040 greenhouse gas emission reduction target (with the ultimate goal of achieving carbon neutrality by 2050).

The European Commission’s proposal calls for a 90% reduction in greenhouse gas emissions by 2040 and aims to strengthen the EU’s credibility ahead of COP30, which will take place from November 10 to 21 in Belém, Brazil.

Granting the leadership of the climate target negotiations to the Patriots group has not been well-received given their harsh criticism of the EU Green Deal.

OBSTACLES • The far-right rapporteur will not be able to derail the EU's 2040 decarbonisation goal alone — they will have to engage in negotiations with other MEPs to find compromise positions that a majority can support. Moreover, the final version of the text will have to be negotiated with the Council.

Nevertheless, the rapporteur will wield an unprecedented level of influence over the EU’s climate agenda for a far-right representative.

CORDON SANITAIRE • Normally, parties to the right of the European People's Party (EPP) are excluded from key roles in the European Parliament, under the so-called cordon sanitaire policy upheld by the main centrist political groups.

In practical terms, when rapporteur roles are distributed through a bidding system, the main groups — the EPP conservatives, Renew centrists and liberals, and the S&D social democrats — usually coordinate beforehand to prevent the far-right from securing those positions.

This time, they failed — apparently due to the EPP, according to Green MEP Michael Bloss (Greens/EFA, Germany), who stated that they stopped bidding and let the Patriots win.

AMBIGUITY • The EPP has not responded to these accusations of inaction, which appear consistent with the group’s increasingly ambiguous stance toward the far-right.

Since the beginning of the current parliamentary term, the EPP — which includes MEPs from France’s Les Républicains and Germany’s CDU-CSU, and has historically played a key role in building the EU — has not hesitated to form majorities not only with the European Conservatives and Reformists (ECR), where Italy’s Giorgia Meloni’s party sits, but also with Patriots for Europe and Europe of Sovereign Nations (ENS), led by Germany’s AfD.

In areas such as agriculture, migration, and the fight against bureaucracy, the right and far-right have increasingly formed tactical alliances.

But where these political forces are most clearly aligned is on the future of the Green Deal — as seen recently in their coordinated effort to undermine the anti-greenwashing directive.

CENTRAL ROLE • The recent assignment of the 2040 climate target negotiations in Parliament to the Patriots seems to confirm fears that the cordon sanitaire around climate policy is breaking down.

The EPP, led by German MEP Manfred Weber, is thus managing to maintain a central role in Parliament by openly working with the far-right while still voting for most legislation with liberals and social democrats — the core of the centrist majority.

On Thursday, for instance, the EPP opposed a motion of censure brought by Romanian MEP Gheorghe Piperea (ECR) against the European Commission and its president Ursula von der Leyen, over criticisms of the lack of transparency in COVID-19 vaccine contracts.

STABILITY • The result: the motion was overwhelmingly rejected (360 votes against, 175 in favor, and 18 abstentions).

“The EPP has once again shown that we are the stabilising force for the European project. We’ve given the European Commission the strength it needs in these turbulent times,” said Manfred Weber.

“Everyone now realises that the new European Parliament has changed radically, that divisions within the Union are deep, and that a new world is emerging,” said Isabelle Marchais, associate researcher at the Jacques Delors Institute, in a recent study on the Parliament.

“For the first time, an alternative right-wing coalition, without the S&D, is now possible in Strasbourg. In the long run, it could weaken the European Parliament, whose political and institutional influence has already declined in recent years, despite the Lisbon Treaty having expanded its powers,” the researcher concluded.

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In Case You Missed It

TRADE • On July 12, Donald Trump announced a 30% tariff on European imports starting August 1, reviving the threat of a transatlantic trade war. These “reciprocal” tariffs — initially set at 20% in April, then lowered to 10% — are now being bumped up again in a sudden hardening of the US position.

In response, the European Commission hit pause on a first batch of countermeasures worth €21 billion in US goods, which had been set to kick in on July 15, in an effort to maintain the possibility of finding a compromise. A second package — covering an additional €72 billion in US exports (think Boeing planes, cars, bourbon, fruit, machinery, and medical equipment) — has been sent to member states for consultation.

EU Trade Commissioner Maroš Šefčovič acknowledged there’s a large “gap” between both sides, and said rebalancing measures would be needed if talks fail. He also hinted at stepped-up coordination with G7 partners like Canada and Japan to respond to Washington’s moves.

Trump, in a letter to Commission President Ursula von der Leyen, warned that any EU retaliation would prompt further tariff escalation — and that rates could still be “adjusted up or down” depending on Brussels’ stance.

Von der Leyen remains committed to diplomacy but stressed that “all options”, including the EU’s anti-coercion instrument, are still on the table.

Across Europe, capitals are split. Ireland supports continued talks, while several EU diplomats have criticized Brussels for being too soft and want a tougher line. Austrian Chancellor Christian Stocker called the US move “regrettable” and pushed for a united EU response.

In Germany, Chancellor Friedrich Merz still hopes to avoid a showdown: he believes negotiations were quite “advanced” and that a “reasonable” deal remains within reach. But other voices — like Italy’s agri-food sector — are raising red flags over what they call a potential death blow to EU food exports.

Markets didn’t take the news well. Germany’s DAX index dropped 1.2% before stabilizing. Carmakers (Mercedes-Benz, BMW) and luxury firms (Hermès, Kering) took the biggest hits.

Brussels and EU capitals have two weeks to avert a major trade shock. The clock’s ticking — and room to maneuver is shrinking.

COMPETITIVENESS • Jamie Dimon, CEO of JPMorgan Chase — the largest US bank — had tough words for Europe: the continent, he said, is “losing” the economic battle against the US and China.

Speaking in Dublin on July 10, Dimon noted that the European economy has shrunk from 90% of US GDP to just 65% over the last 10–15 years. He argued that the EU lacks global companies of the scale of its American counterparts — and risks falling behind.

Dimon also criticized the muted reaction of financial markets to Trump’s tariff threats, and called for structural reforms across the EU.

His comments echo the Draghi report, which urges Europe to craft a bold industrial strategy and mobilize up to €800 billion per year in investment to stay globally relevant.

AI • On July 10, the European Commission published the final version of the Code of Practice for general-purpose AI (GPAI). If approved by the Commission and member states, the code will help companies align with the upcoming AI Act.

Crafted by a group of 13 independent scientists after consulting more than 1,000 stakeholders, the code has three chapters: one on privacy, one on copyright, and a third — by far the longest — on safety and security.

That last chapter only applies to GPAI models with systemic risks, such as GPT, Dall-E, or Grok.

Several late-stage changes were made, including the removal of six out of sixteen safety commitments — among them, a requirement to publish a safety report for every covered GPAI model.

Some observers see this as a win for tech lobbyists, who had privileged access to the code’s authors. Still, parts of the industry say the code remains overly burdensome.

The Commission is expected to publish official guidelines clarifying the code’s obligations — especially around the definition of “provider”. Without those guidelines, it’s unlikely that AI labs will sign on before the AI Act’s GPAI obligations kick in on August 2, 2025.

That said, both Mistral and OpenAI have already signaled they intend to adopt the code.

TAXATION • According to a draft seen by the Financial Times, the European Commission is planning a new tax on companies with more than €50 million in net revenue within the EU — regardless of where they’re headquartered.

The proposal is expected to be formally unveiled today, as part of the first draft of the EU’s new long-term budget.

The goal? Raise new tax revenue. But adopting the measure would require unanimous support from member states. And some — like Denmark and Finland — are already balking at the idea of more EU borrowing or a bigger central budget.

We'll know more when the Commission presents the full long-term budget, including the details of the proposed tax.

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What We’ve Been Reading

• In a brief for the EUISS — the EU’s own foreign affairs think thank — Giuseppe Spatafora and Joris Teer argue that the Union should leverage its growing defence budgets to spur a dual-use technology boom, thus combining security and economic goals.

• In a column published in Projet Syndicate, Soňa Muzikárová backs a European policy of ambitous investment in quantum technologies.

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This edition was prepared by Augustin Bourleaud, Mathieu Solal, Lidia Bilali, Antoine Langrée, Antoine Ognibene and Maxence de La Rochère. See you next week!