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Thursday, 6 June – Elections to the European Parliament to take place across the 27 EU Member States
From 6-9 June, eligible citizens across the EU’s 27 Member States will elect 720 MEPs for the 2024-2029 electoral term. This is the first European Parliament election which will not feature British MEPs and will coincide with local elections in Germany, Hungary, Italy, Ireland, Malta and Romania. General elections will also be held in Belgium and Bulgaria on 9 June.
In the latest seat projections for the European Parliament in 2024, the EPP has shown resilience in maintaining its dominance with a projected 170 seats of the 720 available (from the current 178). This comes as national parties within the EPP political group regained some momentum in countries such as Estonia, Slovenia, and Germany. Spain’s Partido Popular (PP) and Poland’s Civic Coalition (KO) are also expected to contribute a significant number of seats for the EPP.
Similarly, the centre-left Progressive Alliance of Socialists and Democrats (S&D) is forecast to remain the second biggest force in the Parliament with 142 seats, in spite of the suspension of Slovakia's Smer and Hlas. Yet, the reputational costs following the Qatargate scandal should also be taken into account, while Italy’s Partito Democratico and Germany’s ruling SPD demonstrate a declining dynamic which will most likely be reflected in the European elections, leading to a smaller share of seats.
Most notably, the conservative European Conservatives and Reformists (ECR) group and the far-right Identity and Democracy (ID) group are both in the race to become the third-largest group in the European Parliament – although the ejection of Germany’s AfD from the latter will impact its seat numbers. Nevertheless, ID is currently projected to win 69 seats, up from its current 60 with the Dutch PVV, France’s Rassemblement National, Austria’s FPO, and Portugal’s Chega mainly contributing to this increase.
The ECR is projected to win 75 seats (from 66) and although considered a ‘’soft’’ Eurosceptic group it has some hardline elements including from Poland’s PiS, Italy’s ruling party Brothers of Italy, Spain’s VOX and Sweden Democrats.
Overall, far-right and Eurosceptic MEPs are expected to take a total of 184 seats. EPP elements, including Commission President Von der Leyen, have indicated an openness to a right-wing political alliance with Georgia Meloni and the ECR. A potential point of convergence between ECR and EPP has been the push to abandon parts of the European Green Deal in late 2023. However, the S&D, Greens and Renew have indicated they will not support her candidacy to be re-elected as Commission President should any such deal with the ECR emerge.
An early indication of the potential difficulties to be thrown up by the incoming European Parliament will be its vote for Commission President. 361 votes are required and in 2019 Von der Leyen got through the process with only 9 votes to spare. Any lukewarm support for Von der Leyen among the parties who voted for her last time, namely the EPP, S&D and Renew, could see her fall short of the necessary support and her candidacy fail. In this event, the EU Member State heads of government will have to nominate a new candidate with a view to securing the support of Parliament.
Thursday, 6 June – Date by which affected parties should be notified of tariffs on Chinese EVs
Per previous reports, on 4 October 2023, the Commission published a notice of initiation of EU anti-subsidy investigations into EU imports of battery electric vehicles (BEVs) from China. This is understood to have been driven mostly by Emmanual Macron.
Under a notice of initiation, the investigation will be concluded within a maximum of 13 months of initiation. Any provisional anti-subsidy duties may be imposed by 9 months after initiation with affected parties to be given 4 weeks notice in advance of this. Therefore, provisional tariffs, if agreed, should be implemented by 4 July which would mean affected parties should be notified by 6 June. Any definitive measures would be imposed up to 4 months later – these would take the form of countervailing tariffs for 5 years and would need to be approved by a qualified majority of EU Member States.
Report emerged last week that Germany is pushing for concessions which would see the Commission delay notification to affected parties until the week of 10 June and therefore after the European Parliament election. This seems legally dubious, as Article 29A of the legislation governing subsidised imports states that:
“Union producers, importers and exporters and their representative associations, and the country of origin and/or export, may request information on the planned imposition of provisional duties. Requests for such information shall be made in writing within the time limit prescribed in the notice of initiation. Such information shall be provided to those parties four weeks before the imposition of provisional duties. Such information shall include: a summary of the proposed duties for information purposes only, and details of the calculation of the amount of the countervailable subsidy and the margin adequate to remove the injury to the Union industry, due account being taken of the need to respect the confidentiality obligations contained in Article 29. Parties shall have a period of three working days from the supply of such information to provide comments on the accuracy of the calculations.”
There may be some leeway under Article 12. This states that:
“Provisional duties shall not be imposed within a period of three weeks after the information is sent to interested parties under Article 29a (period of pre-disclosure). The provision of such information shall not prejudice any subsequent related decision that may be taken by the Commission.”
It remains to be seen whether the notification will come this week or not. In any case, the Commission is expected to introduce provisional tariffs on Chinese EVs albeit not at a rate as high as their US counterparts. Negotiations can then get underway in earnest as the Chinese will want to avoid these becoming permanent in November.
Thursday, 6 June – ECB Governing Council to meet with rate cuts priced in
On Thursday, the ECB Governing Council (GC) will meet and with a rate cut priced in, market participants will look for clues as to how the GC will approach subsequent meetings. Flash inflation data released this morning will likely reinvigorate the hawks as it rose by 2.6% year-on-year, up from 2.4% in April and higher than the consensus of 2.5%.
Energy and food rose by 2.9%, ending a six-month trend of easing prices while services prices – of particular concern to the ECB – rose 4.1%, the most since November 2023. Inflation now stands above ECB staff projections and this will be a source of concern to the GC.
Nevertheless, the services data can be largely attributed to one off effect in Germany relating to subsidised transport tickets last year. Overall, the disinflationary trend remains intact but this is unlikely to satisfy hawks who will continue to emphasise, as ECB Executive Board Member Isabel Schnabel last month, that the ‘’last mile of disinflation is the most difficult’’ and therefore continue calling for caution regarding rate cuts beyond June.
Thursday, 6 June – CJEU to rule on Ryanair’s legal challenge to €10 billion granted by Spanish government to Iberia / Vueling and Air Europa
On Thursday, the Court of Justice of the EU (CJEU), the EU’s highest court, will rule on an appeal brought by Ryanair against the EU General Court’s dismissal of its legal challenge to a €10 billion Spanish state aid program which it said unfairly benefited rival airlines Iberia / Vueling and Air Europa.
The debt and capital-support fund was designed to back Spanish companies hit by the Covid-19 pandemic and was approved by the European Commission on 31 July 2020. On 16 October 2020, Ryanair challenged the Commission’s approval at the EU General Court and on 18 and 22 December 2020 respectively, Spain and France sought leave to intervene in support of the European Commission – this was granted by the Court on 12 January 2021.
On 19 May 2021, the General Court dismissed Ryanair’s case. Ryanair subsequently appealed this dismissal to the CJEU and a ruling is expected this week. In total, Ryanair has filed 16 lawsuits against the Commission for allowing state aid to airlines across Europe, including Lufthansa, Austrian Airlines, and LOT. In February, Ryanair won its second challenge against a €3.4 billion Dutch state aid scheme in support of Air France-KLM's Dutch unit, after the General Court ruled that the Commission had not taken into account all beneficiaries within the airline group, annulling the approval of the state aid.
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