Despite Far-Right Gains, Centrists Retain Control of the EU Parliament

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The flags of EU countries are seen outside the European Parliament in Brussels, Belgium.

Despite gains from far-right parties, a centrist majority in the European Parliament will elect a European Commission similar to the outgoing one and maintain a European Union that is largely pro-European integration and supportive of the green agenda, prioritizing policies to enhance the bloc's competitiveness, strategic autonomy and defense capabilities over the coming years. European Commission President Ursula von der Leyen's center-right European People's Party (EPP) received the most votes in the European Parliament elections held on June 6-9, gaining 186 seats in the new 720-seat supranational legislature. The center-left Socialists & Democrats (S&D) obtained 135 seats and the liberal Renew Europe (RE) group obtained 79, which gives the three parties forming the current coalition in the outgoing Parliament a combined 400 seats, enough to form a new majority (even if, combined, they lost 17 seats from the previous election). The far-right European Conservatives and Reformists (ECR) and Identity and Democracy (ID) groups came in fourth and fifth place, respectively, with each gaining 73 and 58 seats, respectively. The Greens obtained 53 seats and the Left secured 36. The non-aligned group, which comprises national parties and individual lawmakers not affiliated to any formal grouping in the European Parliament (including Hungarian Prime Minister Viktor Orban's Fidesz party), secured a combined 100 seats.

A smaller majority for the current coalition of center-left and center-right members of parliament compared with 2019 comes as the European Parliament is being enlarged by 15 seats in the new legislature, which means their margin is even narrower.

Moderate parties will likely repeat their alliance in the European Parliament and elect a similar European Commission, guaranteeing a high degree of policy continuity in Brussels, despite an overall more conservative legislature and a potentially less cohesive majority. The election outcome indicates the coalition of center-right and center-left parties will have enough seats in the new European Parliament to repeat their alliance and preserve its majority for the next five years despite a surge in far-right parties across the bloc. Von der Leyen will need 361 votes to be confirmed for a second term. Yet, given the heterogeneity of the alliance, not all parties within the coalition are guaranteed to support her, meaning she will likely need the support of lawmakers from the Greens (like in 2019) or other parties (possibly from the right-wing ECR of Italian Prime Minister Giorgia Meloni) to be reelected. The new European Commission's exact composition and policy agenda will partly depend on which parties will ultimately provide the necessary backing. Either way, while more conservative overall, the new EU legislature and commission will largely maintain their traditional centrist alignment, guaranteeing a high degree of policy continuity. However, given the peculiarity of voting cohesion within groups in the European Parliament — where not all lawmakers follow their group's voting instructions — such a narrow majority will translate into more uncertain outcomes for various commission proposals. Against this backdrop, proposed legislation from Brussels will have a higher chance of being modified in parliament to secure the support of opposition parties. Given a broader shift from left to right in the overall representation of parties in parliament, as well as within the grand coalition itself (with the EPP gaining a more prominent role in the majority), conservative lawmakers could more frequently rely on the votes of right-wing groups on contentious areas like climate change, migration and the economy.

The far-right ID grouping, which includes the likes of France's Rassemblement National, Italy's Lega and the Netherlands' Party for Freedom, gained 9 seats from the last elections in 2019, while RE and the Greens lost 23 and 18 seats, respectively. All other groups largely confirmed their vote shares.
EU government leaders will begin negotiating top appointments for the bloc in the coming months, with the new president of the European Commission set to be elected at the second plenary session of the new European Parliament in September.

The new European Commission will likely prioritize enhancing the bloc's competitiveness, strategic autonomy, and defense capabilities. Brussels' strategic priorities for the next five years will likely be in line with the ones that von der Leyen, as well as several EU member states, highlighted on the campaign trail ahead of the June elections — namely, enhancing the European Union's competitiveness and strategic autonomy, establishing a more assertive industrial strategy for the bloc, reducing the regulatory and administrative burden for EU businesses, increasing support for investments in strategic sectors, and strengthening Europe's defense capabilities and industrial base. The new commission will also remain committed to the Green Deal and its ambitious climate goals, though attention will shift from approving targets to implementing legislation and balancing decarbonization efforts with economic growth, energy security and competitiveness concerns to accommodate conservative views in parliament. On defense, the commission will propose concrete industrial policy proposals to meet the goals of the European Defense Industrial Strategy unveiled in March 2024, seeking to increase investment in defense capabilities and strengthen the bloc's defense industry. This will likely lead to an increase in EU spending on joint defense projects, and see Brussels centralize some aspects of defense procurement.

A narrower majority for pro-environmental forces in parliament will likely translate into smaller margins when supporting further Green Deal legislation, with some measures likely to be watered down, particularly when they affect traditional industries like agriculture, automotive and manufacturing. Brussels' green agenda will thus increasingly focus on attracting more green investment and supporting industry decarbonization efforts and green manufacturing with regulatory and financial support.

Brussels will seek to promote more assertive industrial and economic security strategies with the aim of increasing the bloc's competitiveness and autonomy in strategic technology sectors, but underlying disagreements among member states concerning resources and power devolution will act as significant constraints. The new European Commission will lay out a strategy to accelerate the bloc's energy and digital transitions while enhancing the global competitiveness of EU industries. This will likely involve the disbursement of subsidies and other business incentives across member states to meet specific industrial goals and spur EU and foreign investment in strategic sectors. But underlying disagreements between member states regarding how much national supervision of capital markets should be delegated to Brussels under the long-delayed EU Capital Markets Union, as well as on the nature and extent of the public funding needed to help catalyze private investments, will remain significant constraints toward the creation of a comprehensive industrial strategy for the bloc. Meanwhile, Brussels will seek to implement its economic security strategy with measures to screen foreign investment and ensure supply chain resilience, while gradually developing tools aimed at curbing technology transfers to adversarial countries (like China and Russia), such as outbound investment screening mechanisms and export controls. But while the European Commission will likely acquire an increasingly central role in assessing risks and proposing restrictions to investment into sectors considered of strategic importance, EU member states will retain the power to ultimately restrict exports or investment. Against this backdrop, outbound investment screening mechanisms and export controls for critical technologies are unlikely to materialize for a few years, and member states will remain cautious in implementing such measures for fear of excessively disrupting their trade and economic relations with China.

The proposed EU Capital Markets Union (CMU) would help provide greater, easier and cheaper choice of funding for the production of strategic products and technologies in the European Union. Brussels, as well as key member states like France, Germany and Italy, thus believe that accelerating progress toward the CMU's creation will be pivotal to unblocking the financial resources needed to advance some of the bloc's strategic goals, such as the green and digital transitions or rearmament. But disagreements among EU countries, particularly between smaller and larger member states, concerning how far to devolve national supervision of capital markets under a CMU has hindered progress toward the completion of the long-delayed initiative.
Member states, including France and Germany, also disagree over how much of (and in what form) public funding to provide for sectors like defense, green tech manufacturing and emerging technologies, with Berlin pushing back against Paris' calls for additional common EU debt to finance strategic projects in the European Union.
National governments' reluctance to let Brussels assess security threats concerning their companies' exports and investment decisions, as well as diverging views within the bloc regarding relations with China, will also limit the European Commission's capacity to implement large and effective export controls and investment restrictions.

On foreign policy, the new European Commission will seek to maintain positive relations with the United States (even if former President Donald Trump is reelected in November), pursue a gradual rapprochement with the United Kingdom under a likely Labour government, and implement a balanced de-risking policy vis-a-vis China. Brussels will continue to support strong trans-Atlantic ties and increased cooperation with the United States in areas such as climate change, security, trade and technology, though Trump's potential reelection would complicate this and accelerate EU efforts to seek greater self-sufficiency and diversification on defense and trade. Meanwhile, Brussels will continue to promote positive post-Brexit relations with the United Kingdom, something that a likely Labour government taking over in London after the July 4 general election would facilitate. Meanwhile, the European Commission will maintain a generally balanced approach in its de-risking strategy with China, advocating for cooperation on global challenges like climate change and health while addressing concerns about China's trade practices and human rights record, and the security implications of the bloc's economic dependencies on the Asian country. However, an increasingly protectionist EU economic policy will likely result in policies directly targeting Chinese competition (such as anti-dumping or anti-subsidy import duties on goods like electric vehicles or wind turbines) and subsequent Chinese retaliation, leading to a progressive deterioration in bilateral relations and an increase in trade barriers. Still, Brussels will refrain from imposing extensive export controls and investment restrictions on Beijing, meaning a full-out trade war remains somewhat unlikely. Finally, the new European Parliament and European Commission will remain strongly in support of Ukraine's sovereignty and territorial integrity and maintain a firm stance against Russian aggression, supporting continued financial and military support for Kyiv and sanctions against Moscow. Support for EU enlargement toward the Western Balkans, Ukraine and Moldova, however, will likely slow under an overall more conservative European Parliament, and no new full member will be accepted within the bloc by the end of the legislature in 2029.