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The European Parliament explained

By EU regulatory and public affairs team

Q: Why does the European Parliament matter to business?

A: The European Parliament is a full co-legislator together with the member states in the European Council (ie they make European law together), and therefore has a significant influence on legislation that applies to business. Although the power to initiate new EU legislation rests exclusively with the European Commission, the parliament and the council shape the wording and can have a major impact on how the final rules turn out.

Even in policy areas where the parliament does not have competence, such as competition and fiscal legislation, it is able to exert considerable pressure on the European Commission to legislate or push policy in a certain direction or create momentum around a particular issue (such as tax avoidance).

Q: When are the European elections and how are they organised?

A: The elections will take place between 23 and 26 May. Elections to the European Parliament are largely governed by national electoral laws and traditions. It is typically a closed list system whereby voters cast their ballot for a party and the candidates come from a list. Voters cannot change the order of candidates, and those highest up the list being are the most likely to be elected as MEPs. 

Each EU country has a set number of members of the European Parliament (MEPs) based on its population. Malta, Luxembourg, Cyprus and Estonia have six, while Germany has 96.

MEPs and the member states have agreed to reduce the size of the European Parliament from  751 to 705 seats when the UK leaves the EU, leaving room for new countries that may join in the future. The UK currently has 73 MEPs, so the remaining  27 seats will be redistributed among other member states that are slightly under-represented. France’s share will increase by five to 79 for example, while Ireland’s will rise by two to 13.

However now the date of Brexit has been postponed to at least 31 October, it seems increasingly likely that the UK will take part in the elections. This means that the total number of seats will remain unchanged until the UK’s withdrawal becomes legally effective, after which the member states who were allocated the additional redistributed seats will join.

Q: How do MEPs organise themselves to make decisions?

A: MEPs form political groups in the European Parliament. These groups bring together MEPs from different member states on the basis of their political affinities. Currently there are eight such groups. To get formal status, each must consist of at least 25 MEPs elected in at least seven member states.

The centre-right, pro-integration European People’s Party (EPP) is currently the largest group and includes MEPs from national parties including Angela Merkel’s Christian Democratic Union. Being part of a political group provides access to funding for staff and also determines how much time is allocated during debates, with the biggest groups getting the most time.

Q: What outcome can we expect and will this affect business?

A: It is expected that the larger traditional groups will lose a significant number of seats this year, especially the centre-left. In their place we expect to see a rise in the number of populist, anti-EU MEPs on both the far left and far right.

Historically, populists in the parliament have not engaged in the legislative process and have found it difficult to form alliances. We may therefore see a plethora of small groups and independent MEPs emerge. Alternatively new alliances and political groups could be formed that will take a more proactive role, uniting around their common interest of opposing the EU.

In the past, two or three large groups would be able to unite to vote legislation through. However following the elections we expect these traditional alliances to disappear given the projected loss in seats. Surprising and less predictable coalitions – sometimes between unnatural allies – will need to be forged to find voting majorities.

In practical terms this means a more volatile parliament. Businesses will need to more closely analyse and monitor likely coalitions on individual issues, and think more creatively about how to drive policy. If parliament becomes more fragmented it makes it harder to find compromises and heightens the risk of legislative paralysis.

It is also expected that the number of Green seats will continue to rise. For business this means we are likely looking at a tougher stance on issues such as climate change,  sustainability and data protection as well as in the context of international trade and competition.

Given the continued activity in trade agreements and relationships with key jurisdictions such as China, we do expect the populist groups to take a protectionist stance that could jeopardise the EU’s  openness to investment, business and competition.

Q: What will happen after the elections?

A: Throughout June, MEPs are allocated to the different committees (eg economic affairs, environment, civil liberties, international trade, etc), which then elect their chairs and vice-chairs. Historically, the largest political group gets the first pick of the committees it wishes to lead– the most prestigious being INTA (International Trade).

Each political group will also elect their co-ordinators for the parliamentary committees. These are the groups’ political leaders or ‘whips’. They help their group to reach a consensus on the key topics before each meeting and, together with the chair and the vice-chairs, help organise the committee’s work – for example by nominating ‘rapporteurs’ who are responsible for leading the work on each of the Commission’s legislative proposals.

At the first plenary session after the European elections (in the week of 1 July), parliament elects a new president and 14 new vice-presidents .

Q: What other roles does the Parliament play?

A. One of the first tasks of an incoming parliament is to put forward a candidate to become the new President of the European Commission (more on which can be found here. It also plays an important role in the selection of the commissioners themselves (the process for which is explained in more detail here.

Once a list of candidate commissioners has been agreed, these ‘commissioners-designate’ appear before parliamentary committees in their prospective fields of responsibility (probably in late September or early October).

While parliament cannot formally send any individual candidate home, it does have the power to refuse to approve the full prospective group (‘college’) of candidates. However it can (and regularly does) disapprove of certain individuals, which in the past has prompted candidates to withdraw from the process (with their nominating government suggesting an alternative). As with previous hearings, the parliament is again likely to use this process to show its teeth and influence the policy positions of the incoming commission.

Finally, after parliament has informally approved each candidate, the full commission college, including its president and the high representative for foreign affairs and security policy (the equivalent of an EU foreign minister if this position is retained in the next commission), will be approved in a single vote of consent by parliament.

By EU regulatory and public affairs team

This article was written by our Brussels-based EU regulatory and public affairs team, who provide strategic advice to businesses that helps them shape European legislation.