Global Daily – Three takeaways from the elections

by: Aline Schuiling , Nick Kounis

Euro Politics – No broad-based populist surge, national implications key and Belgium formation marathon – Overnight we had election results for the European parliament, as well as national elections in Belgium. We set out some early thoughts already this morning, and we follow up here with three key takeaways.

Fragmentation rather than populism – Despite all the fears about a populist surge, the bigger trend is one of fragmentation. In the European parliament, the centre-right and centre-left blocks lost ground and will no longer be able to form a majority. However, they should still be able to form one by teaming up with the Liberals and or Greens, which gained seats. Indeed, on a European scale, the feared populist surge did not materialize and the cumulative projected seat total of the four populist blocks did not change much. This should limit any disruption to the parliament’s agenda. All this should also be seen in the context of European elections being sometimes used as a protest vote. Although there was a populist surge in the UK and Italy (see below), in Greece the populist Syriza party lost heavily, with Prime Minister Tsipras calling early elections. They will probably take place at the end of next month, while they were previously scheduled for later in the year. The centre-right ND party will likely win. Meanwhile, in France, the victory of National Rally over Macron’s Republic on the move was striking, but also rather marginal. In addition, the Green party made significant gains.

Domestic implications for UK and Italy – There was a surge in support for populist parties in the UK (Brexit party) and Italy (Lega) to the extent that they got the largest share of the vote. It must be noted that though the Brexit party was the largest single party in the UK, the cumulative vote of Remain parties was higher than that of ‘No deal Brexit’ parties, so the outcome is not straight forward. Still, the strong showing of the Brexit party increases the chances that the next Conservative leader and UK Prime Minister will be someone that promises to take the UK out of the EU with or without a deal on 31 October. So a the risk of a no-deal Brexit has increased, though is not the most likely scenario in our view given that the UK parliament is strongly against such an outcome. Meanwhile, Lega’s surge could make the party more confident that it can gain a majority (together with its right-wing partners) in national elections. Though the majority is not yet convincing according to polls as well as the outcome of the EP elections. It may wait for its support to gain further strength before considering pulling the plug on the current populist coalition government with Five Star.

Formation of a Belgian federal government to take a while – The results of  Belgium’s elections for the federal Chamber of Representatives held a few surprises, compared to what has been suggested by the polls. Most noticeably, the far-right Flemish-nationalist Vlaams Belang (VB) did much better than expected. The party is estimated to get around 18 of the total of 150 seats in the Chamber, which is 15 more than following the elections of May 2014. Comments in the press suggest that the Flemish-nationalist conservative N-VA, which became the single biggest party in Flanders as well as nationwide, might drop its earlier objections against joining VB in a coalition government in Flanders.  However, on a federal level, a coalition including VB still seems unacceptable to all the other parties. Looking at the federal level, only two coalitions seem able to get a majority of the seats in the Chamber. First, the so-called ‘Burgundy-coalition’ including N-VA, the French as well as the Dutch-speaking social-democrats and the French and Dutch-speaking conservative-liberals. This combination would get 80 seats in the Chamber. Still, previous coalition talks have shown that a combination of N-VA and the French-speaking social-democratic PS (which became the biggest party in Wallonia and number two in Belgium as a whole) was not feasible as the ideological differences were too big to be bridged. The alternative coalition (the so-called ‘Purple-Green’) would consist of the French and Dutch-speaking green parties (which combined got 21 seats in the Chamber; 9 more than before), the two social-democratic parties, as well as the two conservative-liberal parties. This combination would get a narrow majority of 76 seats and we still think that this is the most likely outcome. In any case, formation of a new federal government will probably (again) will be complicated and might take considerable time. (Aline Schuiling & Nick Kounis)