What recent elections across Europe mean for EU trade policy

Tue 28 Nov 2023
Posted by: Phillip Adnett
Trade News

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The past few months have seen myriad elections in Europe, with several leading European nations heading to the polls.

The Daily Update spoke to Fergus McReynolds, director of EU public affairs at the Institute of Export & International Trade (IOE&IT), to get a wider perspective on how each of these is being viewed in Brussels and how they might impact international trade policy over the next few months.

Netherlands

The far-right Party for Freedom (PVV) unexpectedly won the Dutch elections last week, possibly heralding the arrival of a Eurosceptic prime minister and causing alarm in Brussels.

Lead by Geert Wilders, a politician with a history of racist and Islamophobic comments, the PVV took 37 seats in last Wednesday’s election.

“We don’t know yet whether he’ll be prime minister. The most immediate thought is how substantial his victory was,” says McReynolds of Wilders’ performance.

That Wilders has been critical of support for Ukraine and is sceptical of efforts to fight climate change have only added to tensions.

As McReynolds says:

“From a Brussels perspective, people are quite concerned.

This is certainly a party that is historically extremely Eurosceptic. Wilders himself has advocated for a referendum on Netherlands leaving the EU.

“While many people in the Netherlands would be confident that wouldn't be a vote that would pass, it certainly sent shockwaves around Europe that Wilders was in this position.”

A GreenLeft-Labour party alliance (GL/PvdA), led by former EU commissioner Frans Timmermans, came second, with 25 seats, while the incumbent centre-right Party for Freedom and Democracy (PVD) slumped to third. In a possible blow to the green party, environmental concerns didn’t seem to play much of a factor.

“I don’t think they did as well as perhaps they had hoped,” says McReynolds of the left-wing alliance.

“As it stands at the moment, the initiative is with Wilders to start the process of negotiation to see if he can form a government.”

“It’s a long, drawn-out process in the Netherlands. It will take months, not weeks.”

In the fractured Dutch system, which currently has at least 15 political parties in the Tweede Kamer (second chamber), Wilders will get the first shot at becoming prime minister.

Historically, political parties have refused to bring the fringe PVV into government, but during the campaign some centre right parties suggested they were willing to consider this.

Dilan Yesilgöz-Zegerius, leader of the PVD, said she would not participate in the next cabinet, but was open to supporting a centre-right government.

Wilders’ efforts hit an early snag this week, as his party’s scout (lead negotiator) for the coalition talks had to recuse himself after being implicated in a fraud investigation.

Spain

Incumbent socialist PM, Pedro Sanchez, has recently secured another term in office after a controversial deal with Catalan separatists. But the means to secure this agreement have raised eyebrows in Brussels.

Sanchez came a narrow second in the most recent election. With the centre-right People’s Party (PP) unable to gather enough support for a coalition, Sanchez was able to return to power for a third consecutive term, but with the support of left-wing and regionalist parties.

In the coalition agreement, Sanchez gave amnesty to members of the Catalan independence movement as part of his deal to retain office.

Previously, several high-ranking nationalist politicians were under investigation or had been jailed after calling an illegal referendum on the question of Catalan independence in 2017.

“I think that that has created a huge amount of turmoil in Spain, but also has created turmoil here in Brussels,” says McReynolds.

“There are some serious concerns in Brussels about the rule of law because of the amnesty that is associated with the agreement.

“The conversation in Brussels is dominated by what the actual final structure of that amnesty agreement will mean, particularly for the rule of law, because there are cases currently going through the Spanish justice system that could potentially be thrown out.”

In terms of trade, the election won’t impact the ongoing Mercosur-EU trade deal negotiations, as Sanchez is largely expected to follow his previous negotiating lines. But time is running out on any deal, warns McReynolds.

“There was certainly a lot of hope for the Mercosur agreement that a Spanish presidency of Europe would see it as a priority and be able to push it further.

“Actually, the election result in Argentina is a bigger issue in terms of Latin American-European trade.”

Poland

The prospect of a former European commissioner returning as Polish PM might not be the magic solution to ongoing tensions between the EU and the Polish government.

It is increasingly likely that a pro-European, three-party opposition, led by former PM Donald Tusk, will take control after the ruling Law and Justice (PiS) fell short of a majority.

Incumbent PM, Mateusz Morawiecki, was sworn in by the Polish president Andrzej Duda yesterday (27 November) but most observers expect the new cabinet to fail to secure enough support in the Polish parliament.

Under the PiS, Poland was a lot more critical in its dealings with Brussels and provoked several diplomatic rows.

Despite this, McReynolds says that it’s important realise that it’s not a simple as Eurosceptics versus Europhiles.

“It's quite a broad coalition of parties. Across Europe it is being painted as a pro-European coalition versus a Eurosceptic government.

“In reality, it's more complex. The coalition is a coalition to remove the current governing party as a priority.”

Just because Tusk, a former president of the European Council, enters office doesn’t mean that things will suddenly turn, says Reynolds.

All three major governing parties have different ideologies and there is a balancing of public opinion to be factored in:

“I would be quite concerned in Brussels that thinking from day one of a Tusk-led government everything is back on track.

“I don’t think that it will be a case of ‘turning the tap on’ and everything is better. It’s going to be a complex process.

“It would be interesting to see how this develops. The expectation of what a government led by him is going to do on a European platform versus the reality of what he's actually going to be able to do.”

The rest

Elsewhere in Europe, the last year has produced a series of election results that give conflicting ideas of where the sentiment in Europe is headed.

From the re-election of the governing centre-right party in Greece, to the election of a pro-EU/NATO president in the Czech Republic and the return of a controversial PM in Slovenia, there’s been a lot to cover.

McReynolds says some of the most interesting results have been regional elections in Germany.

“Germany has always been a federal state, but it's interesting to see the different politics playing out in each of those.”

With elections to the European Parliament coming next year, some observers see evidence of rising Euroscepticism in several of these German state elections.

With the three governing parties – the Socialist Party, Green Party and Free Democrat Party – all languishing in the polls, the centre-right Christian Democratic Union and far right Alternative for Germany (AfD) appear to have gained the upper hand.

McReynolds says that there is currently a “concern about the overall political trend, and that it’s heading towards Euroscepticism at the moment,” noting the possible outlier in the recent Polish elections.