A "black swan" has emerged in European politics.
On June 9th local time, the five-year European Parliament elections ended, and preliminary election results showed that far right political parties were rapidly rising in the European Parliament.
Among them, the French ruling party, the Renaissance Party, suffered a disastrous defeat with a much lower support rate than the far right party, the National Alliance. French President Macron announced the dissolution of the National Assembly and held early French parliamentary elections; On the German side, the Associated Press commented that German Chancellor Scholz experienced a "painful night" because his Social Democratic Party achieved the worst results in history; The Dutch speaking Liberal Democratic Party, led by Belgian Prime Minister Alexander de Kroc, lost in the federal, regional, and European parliamentary elections. The right-wing party, the New Flemish Union, has the highest vote share and is expected to become the largest party in the Belgian parliament.
Analysts point out that a "right turn" in the election results will complicate the EU's efforts to pass new laws or strengthen European integration, and existing EU policies such as green transformation and aid to Ukraine and Russia may also loosen.
At the level of the capital market, both the exchange rate and stock market experienced significant declines. The euro fell against most G10 currencies. The euro against the US dollar exchange rate has fallen by 0.45% to 1.0751, hitting a new low in a month; The euro fell 0.4% against the pound on the day, hitting a low of 0.8453, the lowest level since August 2022. At the same time, European stocks fell after the opening, with the European Stoxx 50 index falling 1.1%, the French CAC40 index falling 2.2%, the UK FTSE 100 index falling 0.7%, Italy's FTSE MIB index falling 0.67%, Germany's DAX index falling 0.58%, and Spain's IBEX35 index falling 1%.
Macron announces
The five-year European Parliament elections will be held from June 6th to 9th local time, with most EU member states, including France, voting on the 9th. French voters will vote to elect 81 European Parliament members representing France, second only to Germany's 96 seats.
According to Reuters on June 9th, due to the disastrous defeat of the French ruling party, the Renaissance Party, in the European Parliament elections that ended that day, with a much lower support rate than the far right political party, the National Alliance, French President Macron announced the dissolution of the National Assembly on the evening of June 9th and held early French parliamentary elections. This is the first time since 1997 that the French President has prematurely dissolved the National Assembly.
The latest export poll results released by French media show that the far right political party, the National Alliance, received about 31.5% of the vote, ranking first among all political parties in France. The ruling party of Macron, the Renaissance Party, suffered a disastrous defeat with only 14.6% of the vote, ranking second.
Marina Le Pen, the chairman of the French far right party, the National Alliance, immediately responded by welcoming Macron's decision and stating that her party is ready to take office after the parliamentary elections convened by Macron are out.
According to reports, after congratulating Baldra on leading the National Union Party to achieve election results, Le Pen stated in front of his party supporters that the party is ready to welcome new parliamentary elections and declared that if it wins the trust of the French, it will be ready to exercise its power.
Le Pen said that she was subordinate to Macron in both previous presidential elections. "If the French people trust us in future legislative elections, we are ready to exercise our power. We are ready to turn the country around, defend the interests of the French, end mass immigration, and prioritize the purchasing power of the French."
Macron stated that the first round of voting for the National Assembly elections will be held on June 30th, and the second round of voting will be held on July 7th.
European mutation
The election results show that significant changes are taking place in European politics.
At the same time, the Belgian general election also came as a surprise. On the evening of June 9th local time, preliminary vote results showed that the Dutch speaking Open Liberal Democratic Party (OPENVLD), where Belgian Prime Minister Alexander de Kroc is based, lost in the federal, regional, and European Parliament "three in one" elections. The New Flemish Alliance Party (N-VA) ranks first in terms of vote share, while the Flemish Interest Party ranks second.
The Guardian, citing the results published on the website of the Belgian Ministry of the Interior, reported that out of over 90% of the votes counted, the right-wing party, the New Flemish Union Party, led the far right party, the Flemish Interest Party, and is expected to become the largest party in the Belgian parliament. The Dutch speaking Liberal Democratic Party fell to ninth place.
Later, De Kro announced that he would resign. He told his supporters, "For us, this is a particularly difficult night, and the signals from voters are already very clear." According to reports, DeKro choked up when announcing his resignation, and after finishing, he wiped the tears from the corners of his eyes with his hand.
In this European Parliament election, right-wing political parties from multiple EU member states have shown strong performance, with varying degrees of increase in support rates.
The Associated Press reported that in Germany, the most populous country among the 27 EU countries, the support rate for the German Select Party reached a record high of 16.5%, an increase of more than 5 percentage points from 2019. In contrast, the total support rate of the three political parties in the German traffic light ruling coalition has just exceeded 30%.
If counted as a single political party, the Chosen Party has become the largest party in Germany as never before. Analysts point out that there may be a sudden change in the German political arena, and it is not ruled out that there is a possibility of choosing a party to participate in governance (more likely a coalition) and bowing down from the traffic light alliance.
The Associated Press commented that German Chancellor Scholz experienced a "painful night" because his Social Democratic Party achieved the worst results in history.
In this election, the seats of the center right European People's Party increased from 176 to 189, an increase of 13 seats, maintaining its position as the first party caucus; The Social Democratic Party caucus on the center left won 135 seats, a decrease of 4 seats; The Renaissance Europe caucus won 83 seats, a decrease of 19 seats, and lost nearly one-fifth of the seats; The Green Party won 53 seats, a decrease of 18 seats, while the Left Alliance caucus won 36 seats. According to CNN, the far right political party is expected to win 150 out of 720 seats in the European Parliament.
How significant is the impact?
Macron said in a televised speech that the results of the European Parliament elections are "not good news for political parties defending Europe.".
The European Parliament is one of the three major institutions of the European Union and the only one directly elected by voters. The number of seats in the 27 member states of the EU is allocated based on their population. The EU's immigration, energy, climate change and other policy bills require a vote by the European Parliament, which also participates in approving the EU's annual budget.
This EU election comes at a time when voters are testing their confidence in this group with a population of about 450 million. The Associated Press commented that this European Parliament election is a major test of the confidence of EU voters. In the past five years, the EU has suffered a series of impacts such as the COVID-19, economic recession and energy crisis. The "right turn" of election results may make it more difficult for the EU to pass legislation, thereby hindering EU decision-making.
Analysts point out that a "right turn" in the election results will complicate the EU's efforts to pass new laws or strengthen European integration, and existing EU policies such as green transformation and aid to Ukraine and Russia may also loosen.
At the market level, the euro fell against most G10 currencies as investors weighed the impact of the European Parliament elections and the US dollar rose. Among them, the euro against the US dollar exchange rate is now down 0.45%, at 1.0751, the lowest in a month.
Christopher Wong, a strategist at OCBC Bank, said about the European elections that, from an online perspective, the election risks are still uncertain. It deserves close attention as the past decade has shown that the rise of extreme right-wing sentiment in Europe may weaken the euro.
Just now, European stocks opened with a general decline. The European Stoxx 50 index fell 1.1%, the French CAC40 index fell 2.2%, the UK FTSE 100 index fell 0.7%, Italy's FTSE MIB index fell 0.67%, Germany's DAX index fell 0.58%, and Spain's IBEX35 index fell 0.29%.