What do the results of the EU elections mean for Brexit?

Ray Taylor Director for Public Policy, PwC United Kingdom 10/06/19

In one of those strange coincidences the World’s two largest democratic votes (India and the EU) take place every five years in May of the same year. This year between the 23 and 26 May some 426 million voters across the EU had the opportunity to select 751 MEPs from a pool of more than 15,000 candidates in the 28 Member States. The results had a few surprises, with implications for the make-up of the European parliament and for the UK.

The two main surprises were the voter turnout of over 50% - a level not seen for over twenty years in European elections - and the success of the Green Party, particularly amongst younger voters in Germany, putting them comfortably into fourth place of the largest political groups in the European Parliament.

The other surprise was that far right groups were no more successful than they had been in the 2014 election. The areas where the far right were successful were in Italy, where the coalition governing League Party won the greatest number of seats picking up 28 of Italy's 73 MEPs, and in the UK where the Brexit party won 28 of the UK's 73 seats.

The big question for the ‘populist’ parties is whether they can find common ground to work together to form a political group. These parties have not previously played an active role in European Parliament decision making, but this could change if they were able to satisfy the group criteria, which comes with funding gains and status.

Whilst Matteo Salvini, the leader of Italy's League, had already started to form a group prior to the election the loss of Geert Wilders party will be a blow.  For the Brexit party, Nigel Farage will have his work cut out as he would be unable to 'adopt' the group UKIP had previously been a member of, with the German AfD party already indicating it was moving to Salvini's group and Italy's Five Star party losing four of its MEPs.

The effect of these results is that the three largest political groups (EPP, Socialist and Liberal groups) will need to work together to pass any legislation in the next European mandate with little room for manoeuvre, leading to the Green Party’s support also likely to be needed. For business, this is likely to result in legislation that moves the ‘regulatory needle’ more to the left and is also likely to make it harder for legislation to pass in the Parliament.

The failure of the EPP party also has implications for the selection of the next European Commission President with their candidate (‘spitzenkandidaten’) for the role, the German Manfred Weber, at risk. This was clearly demonstrated from the discussion at the informal meeting of EU28 leaders on the 28 May where a process to identify a suitable candidate was agreed with many EU28 Leaders, in particular Emmanuel Macron, appearing 'lukewarm' to the spitzenkandidaten process.

We should expect this appointment (and the selection of the European Council President to replace Donald Tusk) to be a difficult process that is likely to result in challenges between the EU 28 leaders and the European Parliament that will likely flow into the appointment of new European Commissioners and will delay the appointment process.

If and when the UK gets to the point of commencing negotiations on future trading arrangements, there will be a number of challenges with a more ‘European’ focused Commission and Parliament that are unlikely to unpick the Withdrawal Agreement and also be open to anything other than a ‘third country’ trading deal for the future. For businesses preparing for Brexit, this means focusing on becoming more agile to prepare for the future.

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Ray Taylor

Director for Public Policy, PwC United Kingdom

Tel: +44 (0) 7976 221038

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