International

Between June 4 and June 7, citizens of 27 European countries voted in a new 736 seat European Parliament. The European Parliament website contains provisional results. This parliament and this election may have a significant impact on a number of patterns in international politics and business. It is worth summarizing some of the results.

Going into the elections, there were several questions. First, would the center hold? With caveats, it did. Second, what impact would the global economic downturn have? Signficantly, the socialists were rejected, to the benefit of the right. Third, how strong would the anti-EU sentiment be in the UK? Very, and this could have some complicating results for the larger European project. And fourth, what does this tell us about the upcoming election in Germany and, potentially, the UK? Labour in trouble in the UK. Probably still good news for the Christian Democrats in Germany.

So, let’s start with the core details, the results, mostly cribbed from the BBC, with additional notes, which are all after the jump.

In answer to the first question, the center significantly held. The European Peoples’ Party (EPP), the party of the center-right, dominated the evening. They had allied with the “European Democrats” to form the EPP-ED parliamentary group that had led the last parliament. the “European Democrats” were, primarily the British Conservatives (”Tories”) and the Czech ODS party. The Tories won 24 seats, up 1 from the previous Parliament, while ODS won 9.  In other words, the old EPP-ED coalition won 297 seats, up 15 from the previous Parliament, while the Liberals added 5, and the Socialists lost 26. Net loss for the center is 6, or less than 1%.  Now this fudges some details like why the Tories and ODS left, but we will get to that.

The center holding is even more remarkable when you look at particular countries. For examples, in France, the socialists lost 13 seats, but Sarkozy’s UMP picked up 11 of those. The Greens also picked up 8, all but 1 of their net gain. In Spain, which has the highest unemployment in the Eurozone, the Socialist government lost 2 seats, with the EPP and the Liberals each picking up one of them. Similarly, in Germany, the EPP lost 7 seats, but the very free market Free Democrats/Liberals picked up 5 of those.

To summarize what happened and to answer the second question, a pro-free market polarity carried the day. Between the EPP and the Liberals, while the Socialists were roundly defeated in nearly every country. In a time of economic unrest, Europeans turned to the right for answers to economic questions.

This is not to say that there were not significant shifts. The most obvious is the underlying cause of the “European Democrats” leaving the EPP-ED, concern about the scope of the European project. In European politics, opposition to EU expansion and the broader European project occupies a similar role as the immigration debate does here. The European Union is the most obvious mechanism of loss of national identity. It is taking people’s money, it is allowing poorer workers who don’t share language and customs from the East, it is more unaccountable and its politicians are in Brussels, not national capitals, etc. The Tories and Czech ODS are openly more skeptical of the European Project. In the UK, the anti-EU UK Independence Party picked up a seat and the far-right British National Party picked up 2. In Austria, Romania, and the Netherlands, this shift has been most clear. There is a clear anxiety about the European project out there that has even  been suggested by German Chancellor Angela Merkel in her recent statement about the European Central Bank.

The clearest manifestation that this anxiety will take will be in how the Lisbon Treaty process is resolved. The Lisbon Treaty is the “Constitutional Treaty” that failed in French and Dutch elections several years ago, and recently in Ireland. In recent months, the Polish and Czech Parliaments have approved it, although the Presidents have refused, so far, to sign the bills. Ireland still has to put it on the ballot again, and, importantly the UK has to do something. The collapse of the Labour Party in the UK, combined with a majority of the vote in the UK for either anti-EU parties (BNP and UK) or skeptic parties (Tories), means that the British government has a crisis on their hands. The old Tony Blair promise of a referendum on a new “constitution” may become politically necessary. The UK may be the block to Lisbon, not Ireland. And all this is prior to the analysis of what The Economist calls “record abstention.”

Finally, the upcoming national elections. The UK Labour Party was crushed. Manuevering has started to remove Gordon Brown, even if Labour Party rules offer no mechanism to allow it. In Germany, Angela Merkel and her preferred allies took 48% of the vote, and a clear majority of the European Parliament seats. Unless something changes, a new, more free market approach is likely coming after the next German election in September. In France, even though Nicolas Sarkozy is no longer personally popular, the Socialists continue to be discredited as a party of opposition.