Financial markets/economy

European election results: what consequences for investments?

Posted by MoneyController on 10.06.2024

European citizens have voted to elect their representatives to the European Parliament: what are the results and how will they affect investments and investors.

What changes in Europe after the elections?

The results of the European elections do not change the scenario in the Parliament too much: the European People's Party remains the most important one, so that Ursula von der Leyen can aspire to re-election again. But it is also true that the right-wing parties have grown, at least to some extent. In this regard, Karen Gilchrist (CNBC) mentions the analysis of Armida van Rij of the thinktank Chatham House: van Rij believes that, on the one hand, the influence of right-wing parties could already be perceived; on the other hand, this result could lead to ‘ pedalling back’ some policy measures, or focusing on others, including some investment and financial measures.

Policies related to sustainability and energy

As can be read in Gilchrist's article, the results of the European elections could have some influence on sustainability-related policies. For example, the focus could be a little less on renewable energy and a little more on energy sources such as nuclear or natural gas extraction. Some continuity, on the other hand, should persist in agricultural policies, after the strong protests by farmers in the first half of this year.

Industrial strategy and economic relations with the US and China

Nonetheless - as Gilchrist (CNBC) reports - Verisk Maplecroft analysts Mario Bikarski and Laurent Balt believe there will be some continuity with regard to two important investment measures related to strategic sectors of the economy: the European Chips Act and the Critical Raw Materials Act. These are both investment and protectionist measures aimed at defending European industry a) from US competition (the country is in the midst of re-industrialisation) and b) from excessive dependence on imports of crucial raw materials and technology devices from China.

France and Germany: national changes with potential European impact

While at the European level, according to Gilchrist's (CNBC) article, it might be difficult for right-wing parties to coordinate effectively, it remains true that some changes at the national level could have a greater impact. French President Emmanuel Macron dissolved parliament, calling new elections, after the results of Marine Le Pen and Jordan Bardella's Rassemblement National (over 31% of the vote). In Germany, the figures were also surprising: the SPD (around 14%), the party of Chancellor Olaf Scholz, was overtaken by both the CDU (30%) and the right-wing AFD party (around 15%).

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