A grand coalition – how the European political groups are carving up the EU parliament

IN: Business news

Following the European Parliament Elections last year, we are now starting to see how the grand coalition of parties within the Parliament are working, and the impact this could have on business.

undefinedMany have commented on the rise of radical, often anti EU parties in the EU elections, however the flip side was the significant fall in the number of the more established centre left, Socialists & Democrats (S&D) and centre right European People's Party (EPP) across Europe. As a result, each group has lower representation in the EU parliament, which makes it almost impossible for either side to form a majority with other groups without the other. For example, a constructive coalition with both main parties was required to ratify the new Commission President and his team.

The composition of the Parliament has had a noticeable effect on key business issues. In December the Commission’s Work Programme was launched, setting out the priorities for the commissioner for the next 12 months, including the legislation that it plans to bring forward and which proposals it plans to remove or review. In particular, the proposal to review the Circular Economy package, which is designed to encourage better use of resources by industry, was welcomed by a number of business groups, but was widely criticised by green groups and the S&D group. This led to the parliament failing to come to a resolution on the Work Programme. In the end S&D opposition to a number of the key programmes, such as the Circular Economy package, meant that the parliament was not able to reach consensus and failed.

The divide in the parliament is also having an impact on the European Parliament's Committees where much of the work of the parliament takes place. Here the balance between the two groups is more marked and the influence of the other parties due to their relative sizes means that finding a consensus in the committee is even more demanding. An interesting case study was the Commission’s proposal for the introduction of a Market Stability Reserve (MSR) for the EU Emissions Trading System (EUETS). The file was led by the Environment Committee, with Industry Committee providing an opinion. However the divide between the two parties meant the Industry Committee could not agree on the final report. It was only by the various groups in the Environment Committee agreeing on a set of compromises behind closed doors that the report was passed by the whole committee in the end. 

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