Shifting majorities: from centre-left to centre-right

From 6 to 9 June 2024, elections were held in the 27 EU member states for the 720 members of the European Parliament for the legislative period from 2024 to 2029. The expected increase in right-of-centre MEPs based on the election forecast materialised. "Green" and "liberal" parties will lose seats.  The change in the composition of Parliament will determine the EU's energy policy direction and will also have an indirect impact on the ongoing negotiations on a possible electricity agreement between Switzerland and the EU.

In addition to the aforementioned shifts in favour of the centre-right parties at the expense of the Greens (Greens/EFA) and the Liberals (Renew Europe), the strengthening of the centrist EPP is one of the most important results of this election. Although the EPP has only gained a few percent compared to 2019, the shifts have given it the opportunity to organise new majorities with right-of-centre parties and, in particular, to block legislative proposals with them. This would be a paradigm shift compared to the 2019 to 2024 legislative period: The European Green Deal and the associated Fit-for-55 package, which were inspired by Green electoral successes, were predominantly passed with the votes of a coalition of the EPP, S&D, Renew Europe and the Greens - i.e. centre-left.

Election results

Grand coalition?

In the elections, EU citizens voted for national parties due to the lack of EU-wide electoral lists. These parties usually join an existing political group in the European Parliament. It is eagerly awaited how the almost 100 non-attached MEPs will behave: the established political groups are campaigning for them to join, but they could also form new political groups.

It is currently assumed that a "grand coalition" consisting of the EPP, S&D and Renew Europe, which has a narrow mathematical majority, will be formed in order to confirm the current and next President of the European Commission Ursula von der Leyen in office during the constituent session of the European Parliament in the week of 16 July. But this coalition is unlikely to last beyond that. Instead, there could be changing coalitions on specific topics during the legislative period from 2024 to 2029.

In addition to the many non-attached MEPs, the entry and exit of MEPs to and from established parliamentary groups and the resilience of the so-called "cordon sanitaire" (the refusal of left-wing groups to cooperate with groups on the right) also make it difficult to predict the majority ratios.

Impact of the elections on EU energy policy

With regard to energy policy, the shrinking of the Green Group in particular has a signalling effect: not only are they represented in Parliament with fewer MEPs, the poorer election result compared to 2019 also signals to the other parties that green issues have been exhausted. While EU energy policy has been part of EU climate policy for the last five years, it could now become independent again or serve to regain the competitiveness of the European Union. EU energy policy would thus become part of EU industrial policy. As the European Commission wants to put a stop to the ongoing and impending exodus of industry, it could, for example, propose legislation to reduce industrial electricity prices.

Threat of dilution in energy legislation

In addition to the reorientation of the EU's political priorities in the energy sector, there is also the question of how to deal with the European Green Deal and the Fit-for-55-package: The Fit-for-55-package aligns the existing EU energy legislation with the target of a 55% reduction in greenhouse gases by 2030 (compared to 1990). A weakening of the EU's 2030 targets in terms of greenhouse gas reduction (55%), expansion of renewable energies (share of energy consumption: 42.5% + 2.5%) and energy efficiency (11% compared to the 2020 reference scenario) is theoretically possible, but would have to be proposed by the European Commission. In view of the high loss of reputation, this seems unlikely.

However, the Fit-for-55-package and the revised EU electricity market design in connection with the energy crisis still require extensive implementation legislation at EU level and national implementation. The changed political framework conditions could lead to the implementation legislation being watered down or delayed by the European Parliament.

Legislative priorities 2024 - 2029

In February 2024, European industry presented a 10-point programme in the Antwerp Declaration: The measures intended to prevent further migration of European industry include the demand for low-cost energy that is available at all times. The declaration, which has now been signed by more than 1,000 companies, is underpinned in the Brussels opinion-forming process by the so-called Letta Report on strengthening the EU internal market and the so-called Draghi Report on the competitiveness of the EU (likely to be published in July). Overall, it can be assumed that industrial policy in the European Union will take centre stage, supplemented by measures to strengthen the EU's independence with regard to the import of (green) technology from third countries.

Against the backdrop of a possible escalation of the Ukraine conflict, political and legislative initiatives to strengthen the defence sector are also likely to emerge. In particular, this could mean that fewer EU funds will be used to implement the European Green Deal. The EU's smouldering trade dispute with China could make it more expensive to import inexpensive green technology from China and make it more difficult to achieve the EU's renewable targets.

All eyes are on the 2040 climate target

The new climate policy stance of the newly elected Parliament will be reflected in the legislative process to set the EU's greenhouse gas reduction target for 2040. In February 2024, the European Commission argued in an impact assessment for greenhouse gas reductions of at least 90% by 2040. The corresponding legislative proposal from the new European Commission is expected in the first half of 2025.

Another important signal could be the suspension or delay of the ban on new registrations of cars with an internal combustion engine (ICE) planned for 2035 under the Fit-for-55-package: the EPP Group might be tempted to please critics of the European Green Deal in this way. A possible European Commission action plan for heat pumps and the ban on fossil fuelled heating systems are similarly controversial and could be thrown under the bus.

Important personnel decisions from the perspective of the energy industry

In addition to the decision on the President of the European Commission, who plays an important role in the appointment of the other 26 Commissioners and the definition of their areas of responsibility, the future Energy and Climate Commissioner (if combined in one person) is crucial for the energy industry. So far, only Teresa Ribera, Spain's current socialist Energy Minister, has brought her name forward: she criticised a possible softening of the EU’s climate targets by Commission President Ursula von der Leyen. Ribera has campaigned for ambitious climate targets and the expansion of renewable energies both in Spain and in the EU. There are concerns due to her anti-market stance, expressed during the reform of the EU electricity market design and triggered a (succesful) pro-market push back.

Formally, the next European Commission - which must oversee the implementation of the Fit-for-55 package - requires the approval of the European Parliament: the European Parliament could refuse to approve an energy and climate commissioner who is too ambitious with regards to the EU’s 2030 targets.

In connection with the aforementioned Antwerp Declaration, an EU Industry Commissioner could also be created, to whom the Energy and Climate Commissioner would have to report. One possible candidate for this position is the current Vice-President Maroš Šefčovič (Slovakia, Renew Europe), who is currently also responsible for negotiations with Switzerland.

MEPs with an interest in energy policy

Although the majority of MEPs were newly elected, many heavyweights in energy policy made it back into Parliament. They will try to be appointed to the Energy Committee (ITRE) and the Environment Committee (ENVI); while the ITRE deals with energy and industrial policy, the ENVI is responsible for climate policy, among other things.

These deputies include, for example:

• Nicolás González Casares (Spain, S&D, ITRE): Rapporteur for the reform of the EU internal electricity market.
• Jens Geier (Germany, S&D, ITRE): Rapporteur for the Gas Decarbonisation and Hydrogen Package.
• Bas Eickhout (Netherlands, Greens, ENVI): Chairman of the ENVI Committee.

• Christian Ehler (EPP, Germany): Rapporteur for the Net Zero Industry Act.

What happens next?

At the European Council meeting on 27 and 28 June, the EU heads of state and government are due to announce their decision on the next Commission President and decide on the strategic direction of EU policy over the next five years.

Following the nomination of the Commission President by the European Council, the candidate must convince the European Parliament, which can either confirm or reject him or her. This is expected to happen in the first week of the European Parliament's session (from 16 July). During this week, the Parliament will also elect its President, probably again the incumbent President of the Parliament Roberta Metsola (EPP, Malta), form committees and appoint members to them. From this point onwards, it will also be clear which MEPs will deal with energy and climate policy and EU-Switzerland relations in the future.

If are confirmed, the newly appointed Commission President will begin putting together the other 26 members of the European Commission. In 2019, Ursula von der Leyen called on the member states to put forward two candidates each - one woman and one man. From October at the earliest, the 26 candidates will have to face questions from MEPs individually, with one or two candidates usually failing. Finally, Parliament votes on the entire Commission, which it can only confirm or reject as a whole. If confirmed, the new European Commission takes up its work.

In 2019, this process dragged on until the end of the year. In view of possible new coalitions in the European Parliament and the snap-elections in France, it could take even longer this time.

And what does this mean for Switzerland?

Official negotiations between Switzerland and the European Union on the so-called package solution began on 18 March 2024. This also includes a possible electricity agreement between Switzerland and the EU. The negotiations are based on the "Common Understanding" of 27 October 2023, which describes the most important topics and - where available - the convergence of positions between Switzerland and the EU. It also contains a target date for the conclusion of the negotiations: The official negotiating mandates of Switzerland and the European Union were adopted on 8 and 12 March 2024 respectively.

Since 18 March, the negotiations have therefore been part of "ongoing business", which will be continued by the current European Commission on a provisional basis until the new Commission is appointed. Anyways the negotiations are essentially being led by the European Commission staff, who are largely unaffected by the outcome of the European elections.

Although the European Parliament is to be kept up to date on the progress of the negotiations by the negotiating European Commission, it will only be involved at a later stage: the European Parliament's right to participate is limited to approving the results of the negotiations, but not the content of the negotiations, which lies with the Council (=EU member states).

As a result, the elections of the European Parliament are therefore likely to have little influence on a possible electricity agreement. However, the shift to the centre-right could possibly curb the enthusiasm of the EU-friendly Swiss parties for greater involvement in EU policy.