What to Expect After the Elections
But also — Franco-German meeting, DSA, Russia, Inflation
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The Briefing
This weekend, European citizens will head to the polls to elect the new European Parliament. With just a few days remaining before the vote, we discuss the key issues to keep an eye on after the elections.
WHAT TO EXPECT? • The European elections are just the beginning of a long process that will determine the organisation of political groups and the allocation of key positions across European institutions.
For context, the President of the European Commission is proposed by the European Council (comprising heads of state and government) through qualified majority voting. The candidate must then be approved by a majority of MEPs.
Since the Lisbon Treaty, the European Council must take into account the results of the European elections — in practice, this means proposing a candidate from the leading European political party.
The European People's Party (EPP, centre-right) is expected to remain the largest political group in the European Parliament and thus propose its lead candidate, Ursula von der Leyen, for a second term as President of the European Commission.
In 2019, von der Leyen was approved by a razor-thin majority in the European Parliament (only nine votes). She received support from a coalition between the European People's Party (EPP, which includes her party, the CDU), the liberals (Renew Europe), and the Social Democrats (S&D).
Only part of the S&D decided to vote for her, which suggests that her nomination also relied on support from other parties.
Polls indicate that the EPP should retain about the same number of seats after the elections. It is expected that S&D will lose some seats, and that Renew will lose up to twenty. Nonetheless, the polls suggest that the coalition between the three parties should keep a majority in Parliament.
But it is far from certain that von der Leyen will be greenlighted by Parliament. It is likely that a small portion of MEPs in each of the three groups will abstain or oppose her nomination. For example, within the EPP, the French Republicans have already hinted that they will not support the former German minister.
Ursula von der Leyen's majority in the European Parliament is therefore fragile. In recent months, the President of the European Commission has sent many signals to the right in hopes of rallying MEPs from the European Conservatives and Reformists (ECR) group to her cause.
PARLIAMENTARY GROUPS • But the election itself is not the complete story. Once the final election results are announced, there still remains the question of how parliamentary groups will be structured. In the weeks following the elections, MEPs will be busy renegotiating the structure of European parliamentary groups.
Overall, most groups should maintain their current form, with a few exceptions. Valérie Hayer, the president of the Renew group, has hinted that the Dutch liberals may leave the group due to their recent alliance with the far-right in the Netherlands.
The question of a merger between the two groups to the right of the EPP — the ECR group and Identity and Democracy (ID) — is also one to watch closely: Marine Le Pen (ID) has proposed to Giorgia Meloni (ECR) to form a "super-group". For now, Italy’s Prime Minister is keeping her options open. An alliance between the ECR and ID groups would make collaboration between Ursula von der Leyen and Giorgia Meloni unlikely.
EUROPEAN COUNCIL • Meanwhile in the European Council, the path seems clearer for von der Leyen. Twelve heads of state and government are from the EPP, and should therefore be expected to support her. Even if Emmanuel Macron and Olaf Scholz could decide to throw in other names — like Mario Draghi for the French or a socialist for the German — von der Leyen remains the main contender.
In a way, Ursula von der Leyen's real campaign will begin after the elections: in the coming weeks, heads of state and government will begin tough negotiations to determine their "conditions" for supporting the President of the European Commission for a second term.
European leaders will also have to agree on the allocation of key roles within institutions, notably the distribution of European Commission portfolios (one commissioner per Member State), the identity of the President of the European Council and the High Representative of the Union for Foreign Affairs. The negotiations will focus on how to allocate these key positions among different political formations.
The European leaders' agenda is busy. Between June 13 and 15, the G7 meeting in Italy will be an opportunity to start informal discussions on these topics. An initial official discussion will take place on June 17 at a European Council meeting. Another European Council meeting will be held on June 27 and 28: European heads of state and government hope to reach an agreement on key positions.
On December 1, the new President of the European Council, who will succeed the Belgian Charles Michel, will take office. They will be chosen by the European Council by a reinforced qualified majority.
EUROPEAN PARLIAMENT • The agenda is also busy for MEPs. After negotiations on the composition of various political groups, the first plenary session of the European Parliament will be held on July 16.
The Parliament will elect its President — Maltese Roberta Metsola (EPP) seeks a second term. MEPs will also start agreeing on the distribution of chairs of various parliamentary committees. Until now, a cordon sanitaire has prevented the ID group from obtaining these coveted roles.
In the following weeks/months, the commissioners proposed by the European Council will be heard by the Parliament, which will then vote by majority to approve or reject their nomination.
In Case You Missed It
FRANCO-GERMAN RELATIONS • The official visit of President Emmanuel Macron to Germany, held from May 26 to 28, concluded with the 24th Franco-German Council of Ministers and a Franco-German Security and Defense Council.
At the close of these meetings, the French president and Chancellor Olaf Scholz signed a joint declaration containing a "new agenda to boost competitiveness and growth in the European Union”. “The EU needs more innovation, more single market, more investment, more level playing field, and less bureaucracy," the leaders stated in an op-ed for the FT.
Five years after the Commission's — poorly received — refusal to authorise a merger between Alstom and Siemens in the rail sector, the two leaders call for "reviewing current European competition rules and practices" to allow "the creation of consortia and consolidation in key sectors" such as mobile networks and aviation. German airline Lufthansa currently faces opposition from the Commission regarding its plan to acquire a stake in Italian airline ITA.
Olaf Scholz and Emmanuel Macron also suggest introducing a European preference for public procurement in strategic sectors, notably defence and space.
The visit also led to a shift in the Franco-German stance on the geopolitical strategy in Ukraine. For the first time, the French president gave Kyiv permission to use missiles supplied by France to strike military targets on Russian territory — the permission only applies to military sites from which Russian missiles attacking Ukrainian territory are launched.
Olaf Scholz, who still opposed sending long-range missiles to Ukraine — unlike France — took a more measured stance during the meeting. However, he eventually aligned with the French position in a press release on May 31. Scholz's U-turn followed Biden's decision to authorise Kyiv to use long-range weapons supplied by the United States on Russian military sites responsible for the offensive around the city of Kharkiv.
DSA • On May 31, the European Commission designated Temu, the Chinese e-commerce platform, as a Very Large Online Platform (VLOP) under the Digital Services Act (DSA).
For some background, the DSA is the European regulation aimed at reducing the spread of illegal content online and improving the transparency of online platforms. It came into force in February 2024.
Temu stated it has 75 million users, well above the 45 million threshold set by the DSA to be designated as a VLOP.
As with all companies providing online services, Temu was already required to comply with the general rules established by the DSA. The platform's designation as a VLOP means it will have to meet additional obligations.
Temu will notably have to develop more advanced monitoring of systemic risks related to the dissemination of illegal content and products and implement appropriate mitigation measures.
This designation follows a complaint filed by the European Consumer Organisation (BEUC) with the Commission. The association accuses the Chinese company of using "dark patterns", which are deceptive interfaces that encourage consumers to make excessive purchases.
The company has four months to comply with the new obligations.
RUSSIA • On May 30, EU member states agreed to sharply increase tariffs on Russian and Belarusian grains. The EU aims to combat their rising imports, which provide significant liquidity to Russia to support the war effort. The regulation, designed not to destabilise global food security in developing countries, was unanimously approved. Hungary abstained. The new rules will enter into force on July 1.
At the same meeting, a delegation of countries led by Sweden asked the Commission to broaden the scope of tariffs, including on more sensitive areas such as liquefied natural gas (LNG) and nuclear. Nearly €42 billion in imports currently evade all sanctions due to the lack of alternative sources of supply.
Using trade policy rather than sanctions is the solution that member states have found to counter Hungary, which delays or blocks most decisions to support Ukraine. This is evidenced by Hungary's blocking of military aid to Ukraine on May 27 (€6.5 billion under the European Peace Facility).
The imposition of tariffs does not require unanimity among member states, unlike the sanctions regime, which falls under the Common Foreign and Security Policy (CFSP).
INFLATION • For the first time this year, inflation in the eurozone is rising. Eurostat released its estimates for May: annual inflation rose to 2.6%, from 2.4% in April.
In recent months, the gradual decline in inflation had led the European Central Bank (ECB) to hint that a lowering of rates could occur as early as June. Despite Eurostat's latest figures, it is likely that the ECB's Governing Council will endorse this reduction.
However, an increase in inflationary pressures could affect the timeline of future rate cuts. The ECB's chief economist, Philip Lane, stated in May that the rate cut process would be "bumpy and gradual."
What We’ve Been Reading
The Fondapol has published a report by Dominique Reynié on Europeans' attitudes towards the EU. Contrary to what populist parties believe, he argues, support for the European Union is widespread.
There have been no massive movements of capital from Europe to the United States following the passage of the Inflation Reduction Act, shows Martin Sandbu in the FT.
Also in the FT: Andy Bounds examines the possible consequences of the Labour Party coming into power in the UK for the country's trade links with Europe.
This edition was prepared by the What’s up EU team, including Luna Ricci, Guillaume Renée, Maxence de La Rochère, and Hana Rajabally. See you next week!