The European Council plays a central role in defining the common political orientations of the EU. With the EU-27’s political leaders represented in the European Council, national inclinations and politics are concerted, as the Member States defend domestic agendas through coalition-building with like-minded countries. Dr2 Consultants’ international team shares some insights on how several upcoming national elections will possibly impact the power dynamics in the European Council.
Changes in the national political arena
The European approach to COVID-19 showed the resiliency of the European Union and its Member States, but it also showed how difficult it is to concert a common approach, and how fragile it is. With domestic change looming, the power dynamics and coalition-building in the European Council is likely changing in the upcoming years. Where the relationship between Merkel and Macron ever more shows the strength of the Franco-German axis in the EU during the recovery phase of the COVID-19 pandemic, German elections and French elections this year could mean a blow to this ‘motor of European integration’.
What to expect?
The months ahead will witness major changes in domestic politics of the EU Member States that have been at the forefront of the discussions around the Recovery Fund allocations: namely France, Germany, Italy and the Netherlands. The European Council dynamics will likely change according to the new political setting that will rise in the upcoming months.
Potential power shift on Franco-German axis
The main uncertainties lay on French-German elections, which, depending on the outcome, might lead to a shift in power relations among the EU Member States. German elections showed a rather fragmented political landscape where, for the first time, there is no clear winner. A coalition is to be formed, but the involved parties are not necessarily aligned to one another in terms of domestic and international policy. Macron’s French influence projection is slowly filling the gaps provided by German political uncertainty, while at the same time keeping a close eye on collaboration with its partner. If France were to take a more influential role within the EU, it could steer the European Council in a new direction. However, this rise in the level of influence could be completely nipped in the bud if Macron were not to be reelected in 2022, and even more so if he were to lose to euro-skeptic Marine Le Pen.
Potential friction on economic solidarity
The new Italian PM Draghi is also likely to trigger new dynamics in the European Council, due to its experience in EU affairs and fiscal rules observation, which inevitably denote recognition of its political stature. Mario Draghi’s expertise in financial matters could boost Italy’s capacity to make the best use of the EU Recovery Fund allocations, avoiding misuse or bureaucratic loops ending up in unspent resources. Finally, the Netherlands, which are so far seen as the guarantor of fiscal respect, risks being further isolated within the European Council due to the difficulties in shaping a coalition government, which could hamper its ability to optimally represent its interests. These political changes could lead to the creation of new relations within the European Council, with the Northern countries losing leverage and the Southern countries gaining ground for a solidarity approach combined with due financial observance.
Country-specific analyses
Dr2 Consultants’ international team constantly monitors political changes throughout Europe, and the subsequent change of political dynamics at the EU level in order to identify threats and opportunities for its clients. After all, the political consensus in the European Council will impact the policymaking direction that the European Commission will take in the long run.
For the interested reader, a short analysis per country follows below.
Germany – a great legacy for a fragmented political landscape
On 26 September 2021, Federal Elections took place in Germany to name the successor of Angela Merkel. A turning point in the history of unified Germany, as the current Chancellor has been in office for more than 15 years. The result is rather uncertain as a rather fragmented political landscape was revealed. For the first time since 1950s, Germany is to be governed by a three-party coalition which is significantly divided on the political spectrum. It is unclear at this point whether the coalition will tilt left or right. The two dominant political camps — the center-left Social Democrats (SPD) and the conservative alliance of the Christian Democratic Union (CDU) finished only 10 seats apart, while the Greens scored their best result of all times finishing third. Most likely, there will be an alliance of the Greens and the liberals (FDP) with either the social democrat SPD or the conservative CDU/CSU. So, the hottest question at the moment is: who will replace Angela Merkel?
As his rivals kept on making missteps during the election campaign, SPD’s Olaf Scholz candidacy to represent a safe pair of hands to succeed Merkel became increasingly plausible. Scholz ran against Armin Laschet – Merkel’s likely successor in CDU – and Markus Söder, the CSU leader of Bavaria. Yet, whoever the next chancellor will be, one thing is clear: either of the candidates will face stronger pressure to provide the European Union with robust leadership.
For sure, the new coalition will have a strong impact on the German-French partnership. The French seem to have strong reservations regarding FDP’s participation in the new government. The liberals oppose France’s key projects at the EU level, such as EU-wide common debt or a European deposit guarantee. In contrast, SPD’s lead candidate Olaf Scholz is better seen by the French, on top of his close relationship with his French counterpart. In addition, Scholz’s openness towards the common EU debt could represent a departure from Germany’s traditional stance of fiscal rigour.
France – a window of opportunity for a plethora of candidates
With the French elections slowly approaching, more and more candidates are taking their run for the presidential elections of April 2022: Paris’ Mayor Anne Hidalgo, who will represent the left-wing Parti Socialiste; Yannick Jadot from the Greens; the far-left Jean-Luc Melenchon, leader of La France Insoumise; Fabien Roussel, leader of the French Communist Party; and Marine Le Pen, the far-right president of the Rassemblement National. This being said, the current president Emanuel Macron remains a strong candidate, although he has not yet officially declared his candidacy.
Polls taken out in early September show that Macron and Le Pen are the strongest candidates, and in a duel in the second round, Macron would outcompete Le Pen with a rather small margin. But one thing is clear, neither Macron nor Le Pen achieved their objectives in the June 2021 regional elections, which, in an unexpected turn of events, favored the Greens and traditional right-wing party Les Republicains.
In this plethora of parties and candidates, the balance tip will advantage those who will master the political speech on wage increases, green transition, and the country’s dependence on foreign supplies. But the main question remains unsolved: how will the French-German partnership look like after the elections, and how will Macron withhold the projection of a strong France in this dual relationship? Unclear is also what stance the other French candidates will take when it comes to EU Affairs. What is clear is that, should Le Pen win, the French pro-EU approach will change dramatically, with the balance of power in the European Council being reshuffled, and consequently the European concerted approach in the European Council on Green Pass and vaccination being at risk.
Netherlands – Mark Rutte to be confirmed as Prime Minister?
The Dutch parliamentary elections took place some time ago, on 17 March. The elections favored the liberal VVD, setting incumbent Prime Minister, Mark Rutte, on course for a 4th term, which could make him the Netherlands’ longest-serving Head of Government. The big surprise of the elections was the surge in support for the socially liberal Democrats 66 (D66) party. The pro-EU party claimed 24 seats, 5 more than during the last election in 2017.
However, as of today, a new government coalition is yet to be formed. On 5 October, it was announced that VVD, D66, CDA and ChristenUnie (CU) will explore a new government coalition, but at least 75 of the total 150 seats in the Lower House are needed to form a coalition. Therefore, several parties need to come together. Due to the fragmented political landscape and recent political scandals such as the Dutch childcare benefits scandal, this process might still take some time.
How will this likely impact the EU’s political landscape? VVD, as well as CDA and CU, hold a more Euro-pragmatic approach, while D66 is positioned as pro-EU. It is likely that D66 will steer the coalition into a more EU direction. And without any plans for the Recovery and Resilience Facility (RRF), there remains more room for negotiation among the parties than previous years. Even if the new coalition will remain on its liberal course, it cannot deny the urgent cross-cutting problems such as climate change and migration that will require an EU approach. Finally, with regards to incumbent Prime Minister, Mark Rutte, if his stay is confirmed, the Netherlands’ reputation of having a critical but accommodating stance in the European Union will remain.
Italy – a European candidate held back by its majority
Following an internal crisis for allocation of power, the former Prime Minister, Giuseppe Conte, resigned and the Head of State, because of lack of agreement among parties, handed the government to the former ECB President, Mario Draghi, in February 2020, instead of launching anticipated elections – after less than 2.5 years since the last political elections. Supported by a strong coalition encompassing all parties but the far-right Fratelli d’Italia, PM Draghi pledged his mandate to four priorities: health, work, EU Recovery Fund and sustainability, to be delivered by a governing team composed of ministries revived from previous governments.
In a time of needed European concertation for both the COVID-19 vaccination efforts and the effective use of the country-allocated EU Recovery Funds, Draghi is determined to reaffirm Italy’s contribution to the European project by fostering sustainable policies, digitalization, integration and, last but not least, a firm approach to introducing a mandatory Green Pass. His active involvement in the European Council’s discussions on integration and immigration, paired with his stance on stricter observance of the rules for a vaccination certificate to combat the COVID-19 diffusion, may propose a balance shift in the European Council, filling the power vacuum left by the German political fragmentation and the uncertain outcome of the French elections.
However, the strength of Draghi’s Cabinet might also mark its end. Indeed, the only obstacle to his power projection comes from the inside, as the right-wing Forza Italia and Lega Nord are slowly gaining confidence and questioning the integrity of the government on two key files: immigration and Green Pass. Should Draghi be able to hold the coalition tight, he’ll probably take Italy out of the COVID-19 economic setback and lead the way to pre-crisis levels for Italy and for Europe.
