Welcome to Better Europe’s weekly update on EU Affairs.
WE NEED TO TALK ABOUT URSULA 2.0
After not so shocking election results, the race for the top EU positions now really begins. Officially, Heads of State will meet for a Summit in Brussels at the end of this month to talk about who will be the next Commission President, Council President, Parliament President, and the High Representative for External Affairs. Unofficially, the same Heads of State will meet already next Monday to discuss these key roles over dinner, with some already holding preliminary talks at the current G7 Summit. While President Ursula von der Leyen’s party (EPP) won this year’s elections and she remains a frontrunner, her fate as a second-term Commission President is not set in stone. Concessions will need to be made to secure her re-election in addition to retaining the Presidency of the Parliament for Roberta Metsola. After the top job at the European External Affairs Service for five years, the Socialists will likely want a change of scenery, potentially moving across the Schuman roundabout to the Council building, swapping places with the Liberals who currently hold the Council Presidency. At the national level, Poland, silent for almost a decade in EU affairs, will want a more respectable spot, for instance, a highly pushed Commissioner for Defence.
RIP THE BAN ON KICKBACKS FOR FINANCIAL INVESTMENT PRODUCTS
Member States have found an agreement between themselves on the future of the Commission’s Retail Investment Strategy. In a press release, the Belgian Presidency refers to the project under its old name, the Retail Investment Package, or RIP for short. “RIP” unfortunately much better describes what is left of the initiative: a shopping list of extremely targeted measures that might make a minimal contribution to “deepening the capital markets union by increasing consumers’ trust in capital markets and channelling private funding into our economy“, according to Belgian Finance Minister Vincent Van Peteghem. Most importantly, the deal buries the restrictions on kickbacks (“inducements”) that distributors receive from investment companies in exchange for selling you a specific product, pushing the debate on the matter a decade down the road. Member States remain however free to ban the practise at the national level, something that only the Netherlands has currently done. On transparency of sustainability impacts, both institutions do support the Commission’s initiative to improve the comparability of investment products for retail investors. With most of the MEPs involved re-elected last week, negotiations between the Parliament and Member States can start after the summer break.
UNCERTAINTY LOOMS OVER EUROPE AFTER MACRON DISSOLVES FRENCH ASSEMBLY
In France, the outcome of the EU elections last Sunday resulted in a devastating defeat for President Macron’s liberal group Renaissance, which gathered just half of the votes of far-right Rassemblement National. In a high-risk gamble, President Macron decided to dissolve France’s General Assembly and call for snap parliamentary elections at the end of the month. In order to regain absolute majority in Parliament, Macron was likely counting on fragmentation of left-wing parties, which had grown apart since 2022 but have decided to re-join forces this year, as well as an electroshock from French voters at the idea of having Le Pen’s far-right in power. Yet, preliminary polls suggest that the Rassemblement National is a clear favourite to win the elections, although an absolute majority is not certain. A major win could lead to serious damage to the European project, as the French far-right – which has softened its anti-EU take in the last few years, at least publicly – wants to replace the Union with a lighter “freely agreed cooperation between Member States”. The Rassemblement National also wants to decrease France’s contribution to the EU budget, slow down military support to Ukraine, and reinstall borders between EU countries for citizens of non-Schengen countries (a logistical nonsense). French voters are scheduled to go the polls on 30 June and 7 June. In the meantime, Brussels holds its breath.