ABSI - Explaining the European Parliamentary Elections

Every Tuesday afternoon we publish a collection of topics and give our expert opinion about the Equity Markets.


The European Union parliamentary elections were held over the weekend and while results are still coming in, initial counts are pointing to big gains by European far-right conservatives and losses to the left and environmental-focussed parties. These voting trends are already causing repercussions around Europe with the biggest surprise coming from French President, Emanuelle Macron, dissolving the French parliament and holding snap elections later this month. ABSI this week will break down the political turmoil engulfing the EU and France. 

As background, the European Parliament is one of three key legislative institutions in the EU, upholding the interests of its citizens as a co-legislative authority, which includes the power to modify and veto legislative proposals, budgetary functions, and influence the selection of the European Commission’s president and commissioners.



Source:  Euro Studies Hub


Every five years EU citizens go to the polls to elect members for the European Parliament, there are 720 seats up for grabs in the latest election, with political groups organising not by nationality but more based on political ideology. The members then elect a President who serves a 2.5-year term, renewable once. 

The EU elections were held last weekend providing valuable insight into the feelings of EU voters at an interesting time in history. As expected, the centrist European People’s Party (EPP) has maintained its control on power as the largest party with ~184. Other far-right parties such as France’s National Rally and Italy’s Brothers of Italy all projected to make sizable gains, which taken together as a single group would form the second largest force behind the EPP. The biggest losers from the election have been the Greens and leftist parties such as France’s Renew Europe which has gone from a kingmaker position of 102 seats to a projected 79 seats.


EU parliamentSource:  Google


It is important to appreciate that while the European Parliament is completely separate from each member’s domestic government, like a State and Federal government that can have different parties in power respectively, the outcomes in these elections do offer keen insight into voter preferences and have repercussions domestically. For example, in the wake of his party earning just 6% of the vote, Belgium’s Prime Minister, Alexander De Croo, has announced his resignation, while President Macron has made the decision to dissolve the French parliament and hold elections on June 30 and July 7. 

While the European election results didn’t come as a surprise, polls had been indicating the tides for some time now, the news out of France came as a complete surprise. Many can’t seem to find the rationale behind the decision, given how weak his Renew Party performed on the weekend (15% of the vote). The decision provides an opportunity for Marine le Pen’s National Party, which dominated the European election by securing ~31.5% of the votes, to gain significant power and pass the prime ministership to the 28-year-old Jordan Bardella. Forcing Macron to appoint a Prime Minister from another party is known as cohabitation and would effectively neuter his remaining 3 years in power.

estimation electionSource:  X

In a national address, Macon stated that his decision to call an election was altruistic in nature; he had heard the will of the people in the European election vote and wanted to give them a chance to decide today if they would like to take France in a new direction. Effectively he wanted democracy to run its course. While this sounds nice on paper, we’re talking about politics here and there is obviously an underlying strategy at play, albeit unclear. 

Personally, I think there is a bit of 3D chess at play here. Macron knows he’s weak right now but can sense the way the wind is blowing. My sense is that Macron looks at it from two angles. Firstly, EU elections aren’t compulsory to vote in and so Macron may be trying to use the recent results as a wake up call to an apathetic base, whilst also catching conservative leaders off-guard. Conversely, if the National Party were to gain power, Macron must believe that they will underperform in office which would put them in a much weaker position for the 2027 presidential election than if they were to remain in opposition. Time will tell the true outcome but please add a French election to the long list of democratic elections in 2024. 


A quick detour to announce the BPC NRL Tipping Competition! 

Welcome to the BPC NRL Tipping Competition for 2024. The season has kicked off with a bang in the glittery lights of Las Vegas. Panthers are favorites to take the crown again but the Broncos look like a formidable opponent to take revenge from the heartbreak of 2023. BPC loves its footy and we're very excited for the season ahead. We also love to win stuff so please keep an eye out for the prizes on offer. Sign up and join the game!


We offer value-rich content to our BPC community of subscribers. If you're interested in the stock market, you will enjoy our exclusive mailing lists focused on all aspects of the market.

To receive our exclusive E-Newsletter, subscribe to 'As Barclay Sees It' now.