Friday, May 24, 2019

EU Parliamentary Elections: 'The Next Few Days Should Be A Fascinating Political Backdrop For A Turbulent Few Years Ahead'

Here Come The EU-Sceptic Parliamentary Elections: All You Need To Know

Today is the official launch date of the EU Parliamentary elections in Europe, which as Deutsche Bank's Jim Reid writes, used to be fairly dull affairs but with the rise of anti-EU and populist party support, and the bizarre situation where the UK is taking part but likely to leave the Union this year, "the next few days should be a fascinating political backdrop for a turbulent few years ahead for Europe."
First some logistics: the EP elections actually take place over the next four days, with each of the 28 countries voting on the day they normally hold national elections. The UK and the Netherlands will kick off proceedings today, but most of the big EU countries (including Germany, France, Italy, Spain and Poland) don’t vote until Sunday. In spite of some countries finishing before then, the votes won’t actually be counted until the polls right across Europe have closed, so as Reid notes, Sunday night is when we can start to expect results, with the final outcome on Monday.
Here Deutsche Bank makes an interesting (or worrying depending on your view) fact about the EP elections: in every vote since they began in 1979, EU-wide turnout has fallen, from a high of 62% at the first set in 1979 to just 43% last time round in 2014. As a result of the EU's crackdown on unpopular, if democratic, choices, the votes are simply not seen as anywhere near as important as national elections but for the EU to succeed it will be difficult if Eurosceptic politics dominate in BrusselsIndeed, populists are expected to perform strongly in the first EP election since the migrant crisis and Britain’s vote to leave the EU in 2016.
As the chart below shows, while nowhere near a majority yet, EU-sceptics are rapidly approaching the critical threshold level, and away from Hungary, where the anto-immigration Fidesz party is expected to hit just about 50%, the most critical country to track will be Italy, where the League is expected to win roughly 33% of the Projected Europarliament seats.

What to look forward to? 
According to the polls, we can expect to see some pretty striking results across the continent, with Eurosceptic parties of both left and right expected get more than 35% of the seats if the current polls are correct, while for the first time ever the two main centre-right and centre-left groupings are projected to not have a majority between them, although pro-European forces as a whole are expected to.
In the UK, Nigel Farage’s Brexit Party, which explicitly backs a no-deal Brexit, is polling in first place, while polls have put the governing Conservatives as low as fifth, something for which there is quite literally no precedent. The Brexit party, having only been formed a few months ago, are now poised to come first in a national election, prompting the following question from Deutsche Bank: "Has a political party ever gone from non-existence to first place in a national poll so quickly?" (The answer is no)
Meanwhile, and just as important, in Italy the right-wing Lega is expected to come first, with its leader Deputy Prime Minister Salvini having railed against EU deficit rules and clashed with other countries over taking in migrants. In France, President Macron’s party has been running neck-and-neck with Marine Le Pen’s Rassemblement National, with the final polls putting Le Pen’s party marginally ahead. This will be one to watch when results come through Sunday night/ Monday morning.
With the big picture in place, here courtesy of RanSquawk are the full details to look for in the next 4 days:
May 23rd-26th will see EU citizens take to the polls to elect 751 MEPs from the 28 member states (inc. UK) with the election taking place against a backdrop of increasing populism across the continent and rising anti-EU sentiment. Investors will be watching the election for any signs of European disintegration.

Voting system
As part of a five-year cycle, EU citizens will be electing 751 MEPs to the European Parliament with each individual nation’s seat allocation based largely on population size. Note, if the UK had been able to ratify a Brexit deal by May 22nd, out of its current 73 seat allocation, 27 seats would have been re-allocated to member states with the remainder  reserved for future enlargements.
There is no uniform voting system across the process, however, all nations use some form of proportional representation. In terms of the order of play, the vote count in each nation will commence when polls close in each member state with  the results to be released from Sunday 26th May at 2100BST when polling stations in all countries have shut. Note, exit  polls will be published after all polling stations have closed with results updated throughout the night.

Nigel Farage, France’s Marine Le Pen, and Italy’s Beppe Grillo, and Greece’s Syriza (before it was co-opted) all levered gains in the 2014 elections into uprisings of sorts in their own countries, but they did not deflect the EU juggernaut one inch from its rigid, imperial, integrationist course. Not even Brexit has done that. Au contraire. Perhaps it will be different this time. Matteo Salvini and Hungary’s Viktor Orban are not outsiders any more. They are in government. Yet as a grizzled, scarred veteran of EU trench warfare for almost thirty years, I remain deeply sceptical. My working premise is that nothing of substance will change unless or until Germany loses faith in the euro project or - much the same thing - Italy’s corrosive debt dynamics finally compel the Bundesbank to cut off Target2 support for the Bank of ItalyWinning elections is never quite enough in the European Union.”

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