Europe is on the verge of major political developments. On May 22-25, EU voters will elect members of the European Parliament. In June, the European Council will appoint a new President and High Representative in charge of Foreign Affairs and Security Policy to succeed the visible Cathy Ashton.
In the parliamentary elections, the center-right Christian Democrats (EPP) and the center-left Socialists and the Liberals are likely to emerge with the largest number of seats. In addition, the right wing Eurosceptic and the extreme left wing are likely to gain seats at the expense of the Center, although to a lesser extent than predicted. This means that the support of the Christian Democrats and Socialists are needed to form a coalition for passage of major legislation. Depending on the elections outcome, the Liberals may be needed as well. The result could be gridlock or a tilt to the right or the left.
Equally important, there is likely to be a struggle over the selection of the next President of the European Commission, EU’s executive arm responsible for the day-to-day running of the bloc. While Member States will want to make the choice, Parliament is determined to have its candidate appointed. The President of the Commission will ultimately have to be elected by the European Parliament (by an absolute majority: i.e. 376 MEPs). Under the current Lisbon Treaty, no individual Member State can block the appointment of the President of the Commission anymore.
The new European Commission will be put in place in the fall. In practice, EU regulatory activities will considerably slow down in the months ahead. At the end of the reshuffle process, significant regulatory changes could be imposed. As a consequence, companies doing business in Europe may face considerable uncertainty.
Companies are urged to follow developments closely and where possible, to participate in shaping the outcome. The situation is fraught with risk but also opportunity.