The right-wing surge in EU Parliament could have implications for Europe and beyond

LONDON — Populist, far-right parties could have a bigger hand in European policymaking over the next five years after initial results from the EU election on Sunday suggested the parliamentary landscape is being redrawn.

Gains for the nationalist Identity and Democracy (ID) party — and losses for the Greens/European Free Alliance — could leave centrist parties dependent on the right for key votes in the 720 seat European Parliament.

The Parliament has, in the past, been led by a strong majority of centrist parties, who typically vote together on issues to win a majority in the 720 seat chamber. Indeed, the center-right European People’s Party (EPP) is once again projected to win the most parliamentary seats and retain its dominance in the chamber.

But a centrist coalition led by the EPP might now depend on support from the right-wing European Conservatives and Reformists (ECR) to pass certain legislation, with research firm Eurasia Group describing the ECR in a pre-election note as potential “key players.”

Meanwhile, an emboldened ID party could apply pressure on Parliament to alter its stance on other contentious issues.

Armida van Rij, a senior research fellow for the Europe Programme at the Chatham House thinktank who was speaking before the results, told CNBC that the influence of the far right was “already being felt” in the EU, but that it could result in further policy shifts and “back pedaling” in the new Parliament.

Here’s a look at how these shifts could impact EU policy.

Immigration will remain front and center of the policy agenda in the next Parliament, with right-wing parties expected to advocate for increased border security and a tougher stance on arrivals from outside the EU.

Implementation will remain a key sticking point, however, with clear divisions between the north and south on the most credible strategy.

“While there is a consensus about the need to curb immigration from third countries into the bloc, disagreements on the mechanism to achieve this will persist,” Verisk Maplecroft analysts Mario Bikarski and Laurent Balt wrote in a research note Tuesday.

Climate policies, which have already come under pressure amid a cost-of-living crisis and weak economic growth, are likely to face further pushback.

Enacting the “Green Deal” — the EU’s flagship carbon neutrality program — is now at “real risk,” according to van Rij, with Parliament having already watered down some legislation to appease the right.

Agricultural policy will likely avoid further restrictions following a spate of farmer protests earlier this year. Meanwhile, plans to implement a ban on the sale of new internal combustion engine vehicles by 2035 could also be scrapped, the analysts said.

Elsewhere, the bloc could shift its focus from renewable energy to shoring up cheaper energy supplies, potentially backing plans for more nuclear power plants or even gas fracking, Citi analysts wrote in a note last month.

Support for Ukraine has come under question amid some EU member states’ ties to Russia.

Dutch ECR member Dorien Rookmaker told CNBC Friday that she does not expect to see a change in stance with the incoming Parliament, adding “I do believe it is in the interests of Europe to keep peace on the continent.”

Nevertheless, the issue of European defense — and how it is funded — will be a hot topic, particularly amid talk of a shared EU defense budget.

“Some of Europe’s far right and far left parties have close ties with Russia and China, which could potentially make them obstruct more defence spending,” Citi analysts wrote. “But [they] are also opposed to U.S. influence in Europe, which could make them support a more European focused defence architecture.”

The EU’s industrial strategy could shift as the bloc treads a fine balance in the ongoing rift between close ally the U.S. and key trade partner China.

The bloc will likely continue to focus on its high-tech and green industries, continuing 2023’s European Chips Act and the Critical Raw Materials Act, according to Verisk Maplecroft’s Bikarski and Balt, while potentially taking a tough stance on Chinese imports.

“The incoming Commission and Parliament are likely to continue the trend towards greater protectionism and intervention in strategic industries, although the EU will remain an open, trade-dependent economy,” they wrote.

Elsewhere, enlargement of the EU could face further setbacks with a larger euroskeptic presence in Parliament.

“EU policy towards enlargement will remain supportive on paper, but weak political will and nationalist domestic politics within many member states will likely prevent the acceptance of new members during the term of the next Commission,” Bikarski and Balt said.

“This, coupled with sluggish progress on accession negotiations in all candidate states, means that the EU is expected to remain a 27-member bloc by 2029,” they added.

Still, given existing fractures within and between the ECR and ID, it remains unclear how successful they will be in creating a cohesive hard-right faction to shape key legislation.

The ECR, for its part, has said it wants to strengthen member states by shrinking EU institutions and cut climate change policies by turning the EU’s Green Deal (a set of EU-wide climate proposals) “on its head.” The ID has gone further, advocating for a more hard line stance on immigration, opposing a euro zone budget and expressing skepticism toward Brussels in general.

“Internal squabbles could prevent them from translating these gains into a much bigger impact on policies,” Berenberg Economics said in note last month.

“It’s partially up to the far right and the extent to which they can organize themselves to assert influence,” Chatham House’s van Rij added over the phone.