The European Parliament elections of 22-25 May will mark a turning point in the economic direction of the EU, writes Tim McNamara.
The hegemony of liberal economic thinking will be challenged and the political base that has supported it will be significantly diminished. The steely-eyed focus on budget discipline at the expense of social harmony will inevitably come under much greater political scrutiny. It may well mark a return to Keynsian thinking about the role of the state in a time of economic difficulty.
The main result of the election is that the centre-left grouping in the European Parliament will now be on a par with the main centre-right group. Furthermore, with the support of the leftist GUE-NGL group and the occasional support of the Greens (G/EFA), a left alliance of just under 300 MEPs will have greater influence than the centre-right’s 250+ MEPs. They voted the same way 75% of the time in the last parliament.
The Greens/NFA and GUE/NGL vote together on most occasions. On twenty of the major issues in the previous parliament, they differed on only two of them (whether the EU should have its own diplomatic service and should the Commission have greater powers to enforce budgetary discipline in the member states).
The centre-right’s bloc was not just based on the size of the European People’s party (EPP) group but could almost always rely on the votes of the European Conservatives and Reformists (ECR) on economic issues.
Because of the relative strengths of the party groups in the new parliament, it is now almost impossible that the centre-right in the form of their pan-EU political group EPP will be able to hold onto the presidencies of both the Commission and the European Council.
There will also be increased pressure on the the ECB (European Central Bank) to reverse its ultra-tight monetary policy and adopt an element of quantitative easing. Unchallenged the current ECB’s policies carry a great risk of deflation which will only serve to aggravate the economic crisis in several eurozone countries. Merkel’s Christian Democratic party will no longer be able to dominate economic thinking amongst MEPs in the same way it did through the dominance of the EPP in the last parliament.
The EPP has dominated the institutions of the EU for several years. Both the President of the Commission Jose Barrosso and the President of the European Council, Herman Van Rompuy are members of the EPP. The EPP was also the largest grouping in the European Parliament. The President of the ECB enjoyed EPP support also.
Along with their UK Tory-dominated allies in the European Conservatives & Reformists (ECR) their two blocs had 331 members between them. This far outweighed the Socialists & Democrats group (S&D) who had 196 members. What had compounded this was the undue influence the six largest Member States (which make-up 70% of the EU’s population) enjoy in Europe’s politics.
In the last Parliament, the EPP and ECR had exactly 200 members from the big six Member States compared to 102 from the S&D group. This will change decisively in the large Member States (with a decrease to between 150 and 160 MEPs for the centre-right and an increase for S&D alone to about 120 MEPs) add in the representatives of GUE/NGL and the Greens/EFA and the left bloc musters about the same amount i.e +/- 160 MEPs.
This is significant, it may be wrong that MEPs from the six biggest Member States have undue influence, but it is a fact of political life in the parliament. Their representatives inevitably carry more clout than those from smaller member states (though through either force of personality or technical expertise, there are a few exceptions).
The role of the far-right and the extreme-right as well as other populists (e.g Italy’s Five Star movement) should also not be underestimated; many have been elected partly on an anti-austerity ticket. Hence, they would be highly unlikely to be natural bedfellows of the centre-right on neo-liberal economic issues.
Whereas a significant amount of the firepower of the new economic governance regime in the EU is largely intergovernmental, the role of the Commission and by extension the Parliament is still influential. The make-up of the new parliament will inevitably alter the balance of economic power amongst the institutions and the member states. It looks like the sun is beginning to set on the age of austerity in the EU.
Tim McNamara is head of the Peercourt consultancy firm. He was previously political editor at the European Commission.
