The European Election

This may be of no interest if, as expected, we leave the EU. But on the off chance we don’t…

The European election is a curious double election going on at the same time. Voters get to vote for parties, to decide how many MEPs of each party get in from each member state. The parties are numerous and diverse with many of them rooted in the national politics of the country concerned. The parties propose a list of named candidates and the order of their possible election. It is a proportional system where the more votes a party gains the more candidates it gets elected.

Simultaneously, so-called Spitzenkadidaten hold debates for the powerful post of President of the Commission. These candidates represent various Europe wide alliances of parties participating in the election proper. At this level, the election is fought between Europe wide coalitions of parties. The traditional groups of the EPP (Christian Democrat style centre right parties) and the PES, European Socialists (Social Democrat parties) now fight it out against European Greens, European Liberals (ALDE), the Alliance of Conservatives and Reformists (ACRE), the European Left and various other parties not part of those six groupings. Voters do not get a vote on the post of President.

The candidates for the powerful post of President of the Commission are battling for the right to fashion an EU agenda and to propose and write the legislation the EU will undertake. The Commission has sole right to propose laws. It runs the budgets and represents the EU internationally. After the Parliamentary election, the member states will work out who to propose to the Parliament as Commission President. It does not have to be one of the Spitzenkadidaten, but it does have to be someone who can command a majority in the 751 seat Parliament. The European Council, the meeting of member states governments, is charged by Treaty to “take into account” the results of the Parliamentary election (Treaty Article 17.7) and to create a qualified majority of votes around the Council table for a Presidential nominee to put to the Parliament. The Parliament has to approve by simple majority.

The events that follow the election include the appointment of an entire new Commission with roles for each Commissioner, and the fashion of any policy changes that the new Commission and Parliament may wish. Commissioners are proposed by member states governments, but the newly elected President of the Commission will have views on their suitability and the Parliament has to approve the Commission as a whole. There is intense lobbying over which roles any given Commissioner may receive as well as over the actual names in some cases that states recommend.

Given the likely balance of forces in the new Parliament, there remains a considerable force for business as usual, with a larger and noisier Parliamentary opposition to what is going on.

The populists may agree that they want some fiscal relaxation by the EU, though Germany’s AFD is unlikely to support that. They might agree they want more power returned to member states, and more action taken on the EU’s common external borders over migration and security. The new Commission will need to make difficult decisions about how serious the challenge to the EU plan now is and whether they need to be more accommodating than the outgoing government. There is likely to be much noise and argument before a new President and Commission is agreed and a new programme of work announced. This could be a little unsettling for markets. Thereafter, there may be more of a debate over whether some change of fiscal stance is needed and whether there can be the moves towards a Euro area larger budget with more transfers of money as some would like.

With thanks to Charles Stanley & Co. Limited who are one of the oldest firms on the London Stock Exchange. Its origins lie in a banking partnership established in Sheffield in January 1792.