IMPLICATIONS FROM EUROPEAN ELECTIONS
Elections to the European Parliament (EP) are taking place every five years since 1979 und usually do not receive much attention. This time is different. The EP elections are in the centre of interest as Eurosceptics are on the rise in national elections.
- The May 23-26 European Elections will likely result in a big gain of seats by Eurosceptics. We expect a coalition of Conservatives, Socialists and Liberals or Greens to retain a pro-EU majority in the more fragmented parliament.
- The outright impact on politics is low as the EP has no right to initiate legislation and key policy decisions require approval from the European Council too.
- Political consensus might shift towards populist stances and decision making in crucial areas may be delayed. The EU budget negotiations could become very cumbersome. Also, national tensions within the Commission may emerge.
- The nationality of the new EC President will also be important as this has implications for the new ECB President given country key considerations.
- The outcome of the election will be crucial for the survival of the government in Italy and the direction of its fiscal policy. In the UK, a strong showing by the Eurosceptic faction will make the hard Brexit tail risk fatter.
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