European Parliamentary Elections

Macro Monday

In the 2019 European Parliamentary Elections turnout stood at 50.66%, well above the 42.6% seen in 2014.?

European Parliamentary Elections

This morning’s headlines have been dominated by the fallout from the provisional results of the European Parliamentary elections.

Provisional results show Ursula von der Leyen’s Centre-right European People’s Party holding the largest number of seats in the assembly with 186. This represents a marginal advance from the 177 seats that the alliance previously had with von der Leyen stating that “There remains a majority in the centre for a strong Europe...in other words, the centre is holding. It is also true that the extremes on the left and the right have gained support”.

The EPP was followed by the centre-left group, the Socialists and Democrats on 133 which was historically the largest alliance in the assembly until 1999. The third largest group is the liberal, pro-European Renew Europe group on 82 seats. This is ahead of the Eurosceptic right wing European Conservatives and Reformists on 73.

On 60 seats is the Far-right Identity and Democracy group – often abbreviated to ID – which is an alliance formed of nationalists, populists and Eurosceptics. The far right however have been split on a number of issues, not least on policies towards Russia and Ukraine, indicative of how unity in the European parliament could well be problematic moving into the 2024-2029 parliament.

The Greens struggled amid the shift to the right, with the alliance taking 53 seats – losing 20 seats. The Green’s losses were partially prevalent in Germany and France where the exit polls suggested that their vote share halved from the 2019 election.

Attention now turns to the wider fallout from the elections, not least on its far-reaching implications in France…

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Macron Calls Snap Election

Following last night’s exit polls, yesterday evening French President Emmanuel Macron called a snap parliamentary election. This marks a huge gamble as the President looks to fend off – at least in part – the challenge posed to his Renaissance party from the far-right.

In an address to the nation last night, Macron said that the far-right is "progressing across the continent" before saying that "I have confidence in the ability of the French people to make the fairest choice for themselves and for future generations” in a subsequent tweet.

The first round of the parliamentary elections will take place on 30 June ahead of the second round on the 7 July.

Macron’s statement that "I cannot act as if nothing had happened” follows France’s National Rally party, led by Marine Le Pen, winning some 31.5% of the vote share in the European Parliamentary elections in France. This is against the Besoin d'Europe alliance (of which Macron's Renaissance party is a part) which took just 14.5% of the vote share. This comes as the France’s socialist alliance took 14% while the left-wing populist party La France Insoumise took 10%.

Given that these legislative elections could usher in a new Prime Minister, many commentators are suggesting that Macron – who is set to serve as President until 2027 –could well become a lame duck President if the latest European elections are replicated in France’s parliamentary elections. His hopes are of course that the electorate’s voting intentions in the European elections will differ sharply from that of a national election.

Hence, Macron will be hoping that his gamble will not end up like Jacques Chirac’s 1997 snap election which backfired tremendously and ultimately led to the incumbent’s party losing out to the Socialists.

The French CAC 40 Index has fallen some 2.4% on this morning’s open as markets react to the uncertainty around the elections. French bonds are also coming under pressure with the gap between the German bund widening.

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Today in Focus

As attention continues to focus on developments form the European Parliamentary elections, in the UK all eyes will be on the string of manifesto’s released this week, kicking off with the Liberal Democrats today. This follows Japanese GDP which came in at -0.5% for the first quarter of the year, in line with expectations and the previous print.?