EU elections: Fragmentation and paralysis?

As 373m Europeans head to the polls – we ask one simple question. Will the rise of the far right across the EU endanger the energy transition? Pollsters are warning a swing right – and left –  will fragment the European Parliament and could paralyse decision making. So, will the hard-fought parliamentary consensus for the green shift become fragile over the next five years?

Host: Richard Sverrisson, Editor-in-Chief, Montel

Guests: Raphael Hanoteaux, Policy Advisor, E3G; Siobhan Hall, Brussels correspondent, Montel. 

Transcript

Richard Sverrisson, Editor-in-Chief, Montel: 0:06

Hello, listeners and welcome to the Montel Weekly podcast, bring You energy matters in an informal setting. As we speak, voters across Europe are casting their ballots to vote for the next European Parliament. In today's pod, we'll take a deep dive into potential makeup of the EU legislative body and the impact on energy policy. There are concerns that a shift to the right or increased fragmentation could derail important environmental and energy policies. In particular, the 2040 targets. Is this fear justified helping me, Richard Sverrisson to answer this and much, much more Raphael Hanoteaux of E3G. Welcome to you, Raphael. I hope I haven't totally butchered your name.

Raphael Hanoteaux, Policy Advisor, E3G: 0:50

Thank you, Richard. No, you said it perfectly. Thank you.

Richard Sverrisson, Editor-in-Chief, Montel: 0:52

And Siobhan Hall, Montels Brussels correspondent, welcome back to the Pod Siobhan. I hope you're well.

Siobhan Hall, Brussels correspondent, Montel: 0:57

Thank you. I am. Thank you, Richard.

Richard Sverrisson, Editor-in-Chief, Montel: 0:59

If I can start with you, Raphael, let's talk about energy in the context of the EU elections. Is it a big topic for voters a across the 27 Nation block, do you think?

Raphael Hanoteaux, Policy Advisor, E3G: 1:09

So we are hearing a bit of everything in terms of what are the priorities and the main topics of the next EU elections. What I can say is that so far. Energy has been a very important topic in Europe in the last three years, let's say. We had the energy crisis, we had the Russian invasion of Ukraine and all of that propped up energy issues to the forefront of the public debate. So while we are now looking at the European elections coming very soon. And different parties 27 countries have 27. Also different angle and ways to frame the debate. Energy might not be the number one preoccupation, but it's still something that is very much at the forefront of the thinking. The main difference or the main I would say characteristic. This year's election is really the fact that now energy is also seen as a broader issue linked to security, defense, competitiveness, industrial policy, all of that kind of coalesce together to, to make this question of energy still a bit central.

Richard Sverrisson, Editor-in-Chief, Montel: 2:08

Siobhan, what would you say about the discourse around energy in Brussels? Is it more, as Raphael says about security of supply and competitiveness? Moving a little bit away from the environmental side of it,

Siobhan Hall, Brussels correspondent, Montel: 2:20

what we hear is a lot more about industrial policy, and that is also about the environmental side of it. Because the industrial policy is, the environmental goals are pushing EU industry to decarbonize. Decarbonization comes at a cost industry is saying how do we pay for this? So it is not necessarily that they are giving up on greening the sector. They're saying, yes, we'd like to green the sector. There are benefits in terms of, as you say, security of supply, reducing dependence on imported fossil fuels. But the big question probably for the next five years is how do we pay for it? Who pays for it? And how does industry. Either become or remain competitive with other blocks like China or America who might be taking different paths to the same outcome.

Richard Sverrisson, Editor-in-Chief, Montel: 3:13

Absolutely.'cause de-industrialization is certainly a threat in some countries, or at least and a perceived threat. And we discussed that length in last week's podcast. But Raphael, if I can talk to you about, who are the main parties at e level, at who are actually out there fighting for these votes? And what is the energy policy in their manifesto? How do they compare?

Raphael Hanoteaux, Policy Advisor, E3G: 3:33

You have various big political groups in the European Parliament. You have policies within those groups. But when we're talking about the European Parliament, most of the time we're talking about the groups themselves. And you have, seven or eight country groups. It depends on how you count them. But it goes from the far left. What was previously called the unit left which is now just called the left. You have the Greens Group you have the Renew Europe Group, or which was previously alde the E-P-P-E-C-R. And id ECR and ID are traditionally seen as the far right groups. There's still a bit of difference, for example, of the composition of ID or ECR because ECR formerly hosted the Tories the British Tories, for example. And EPP is also, for example, the home of the Finnish the group of Victor Orban with also notoriously on the. This does not completely overlap with the national categories, but these are mainly the groups that are present at the European Parliament.

Richard Sverrisson, Editor-in-Chief, Montel: 4:31

So in the EPP group, okay, but you have the basically the Christian Democrats of the, of Italy and of Germany. Where would Macrons parties stand? Where would that fit in?

Raphael Hanoteaux, Policy Advisor, E3G: 4:41

Macro when he arrived on the scene joined the renew group. So the alde the centrist group. I would say there again, within the Renew group, you have very different ways of seeing politics. So for example, up until now, and it's. Probably going to change in the future with the new European Parliament. But up until now the Czech Alde was or the Czech party of Prime Minister, former Prime Minister Babish was sitting in Alde. So you have formation that are maybe a bit more populistic or a bit different from Macrons very pro-European stance on on, European affairs, I would say.

Richard Sverrisson, Editor-in-Chief, Montel: 5:17

And on the left. What would we see there? What parties there?

Raphael Hanoteaux, Policy Advisor, E3G: 5:21

Yeah, on the left, one group that I forgot, and that's my mistake, is the socialist group. Obviously the SNDs, socialists and Democrats there, very obvious. So that's a very important group. But I would say. Properly. On the left you have socialists and Democrats, and you have the left group. Then we also traditionally understand the greens as also primarily a left leaning group, but it's more defined by its climate and environmental stance than other issues so far.

Richard Sverrisson, Editor-in-Chief, Montel: 5:45

Yep. Absolutely. And this, there's a sort of a term, the Grand Coalition here at EU level, isn't there, Siobhan? The s and d so the socialist and the EPP, the European People's Party. And they are predominantly, pro climate policies and environment policies, or is that too crude a way of putting it?

Siobhan Hall, Brussels correspondent, Montel: 6:02

I think it's fair to say that in general the main centrist parties, so the EPB. S and D, and they're a new LD group, will generally vote together in order to avoid siding with far right groups. So generally speaking, the Rapporteur. So the people who negotiate EU legislation, they are looking for, they're looking for common ground between the three big parties. P, PEP, PS and D and renew. And if they can get that, then they have a majority and they can get things through. So where you might see so the Greens, for example, are always pushing for more ambition on environmental issues. And the far right parties might, in a very general way, be pushing for less ambition. And so there's a balancing out there, but generally it's the position of those. Three parties coming together, which it's generally the final compromise. That's a great.

Richard Sverrisson, Editor-in-Chief, Montel: 7:03

And is that expected to hold that sort of central ground that, has come together and enabled the far right not to take a hold or to have so much of an influence? Raphael,

Raphael Hanoteaux, Policy Advisor, E3G: 7:12

I would say that will depend a lot on the elections result, but also on the choices but also on the choices, strategic choices that will be made. After the elections. So for example, how do you build your majority? If you look at the center majority, you could see this socialist renew, EPP. They might have a majority, they might have to complement it with the greens, depending on their and on their own results. But this also depends on, you know, the prevention or the acceptation of the EPP, for example, to trade with the far right with the ECR and ID parties, for example, because in the case of a very strong surge of ECR and ID, these r right groups or. On the right of EPP, then it could be possible that a coalition exists between these two group three groups and that they have a majority through that. It's not very likely, but it's still possible and it will depend a lot on, who's the third biggest group? Who's the fourth biggest group? Because the, this decision. Will be made. And then the next layer is also obviously the political decision of the next European Commission President. We do not know who that might be. We know that UL Lion is running for a second term but then this president will have to secure the support of the European Parliament to get elected. And the priorities of the next commission will also depend on the support of the groups. And the groups might negotiate their support in exchange for their priorities being represented in the next commission's priority.

Siobhan Hall, Brussels correspondent, Montel: 8:37

I think if I could just come in there as well, we're talking here about the European Parliament because the elections are coming up. And then after the elections, European parliament will be appointing a new commission president, which is Raphael was saying, will set the agenda, but there's also a parallel track, which is the EU leaders. So the EU leaders will also be session a strategic agenda, which will influence the commission and. So the polling data shows rises a rise in far right gains in the European Parliament, but the EU leaders are representing the national governments and at the national governments so far there isn't the same. The majority of national governments at the moment are still part of the EPP, the s and d and. I dunno if there's nuance, but generally speaking, yes. It's still, they still represent these more centrist parties groups and they will also be very influential in deciding who the final commission president is. And they will also be influential in deciding what the priorities are. So it's important to know that there's this other element which is just as influential as the parliament in the process.

Richard Sverrisson, Editor-in-Chief, Montel: 9:39

Absolutely. And I think, so the horse trading will begin for from next week onwards, yeah. Okay. But then, you know, Siobhan, you mentioned the Rapporteur now, I mean, could you just give us some sort of idiots or bluffers guide to how the European Parliament operates? Because I think a lot of our listeners, it's a little bit of a, not quite Byzantine, but it's quite elaborate and it's a quite a complex set of, com complex process, if you like, of how legislation is formed. Could you just, maybe summarize the key elements for us?

Siobhan Hall, Brussels correspondent, Montel: 10:08

Yeah, so I think the thing to remember about the European Parliament is it's not like a national parliament, so the European Parliament relies on proposals from the European Commission. So the European Parliament in and of itself doesn't propose any legislation. It has to wait for the European Commission to make a proposal once the European Commission has made proposal. Then assuming that it's a proposal which the European Parliament has the right to make decisions on, which is generally speaking, anything to do with energy and climate and so on. So when the European Commission, for example, comes with its proposals for 2040 targets, the European Parliament will have a stay on that. And so what will happen is the European Commission will propose some legislation. The European pilot, it will be. There will be a specific committee within the European Parliament, which is like a national parliament. There'll be a specific committee within European Parliament. It'll be very likely the Industry and Energy Committee, or possibly the environment committee. It might be both because there's overlaps and then the smaller number of meps. The members of European Parliament in those committees will discuss and debate the proposal, and they will make changes to it. And they will have to form agree compromises and they will have to come to their own version. Again, the important thing to remember is there is always a parallel track where the same legislation is also being discussed by experts, national diplomats from EU member countries, and they also will have to come up with their own version. And so the final version of leg EU legislation is always. A compromise between what the national governments want to see in that legislation and what the European Parliament wants to see in that legislation. So it's a process that can take anything from 18, usually takes around 18 months, two years, depending on how complex the proposal is. It can be quicker if it's a very simple or very precise proposal can be longer if it's complex.

Richard Sverrisson, Editor-in-Chief, Montel: 12:08

And Raphael, as you were saying, the makeup of those committees will depend largely on what happens in these elections over the of the coming days.

Raphael Hanoteaux, Policy Advisor, E3G: 12:15

Yes, absolutely. First of all, obviously the committees mirror of the composition of the wider parliament of the plenary parliament, but also each group. Depending on its score, the election then gets a certain number of points or, her strength and then can decide to allow these points to for example, secure a place as a chair of one committee. If you're s and Ds, for example, you absolutely want this committee. You would spend a certain amount of point to ensure that you have the chair of, or the vice chair, and you have this process going on for for the committees, but also for the reports of of the parliament. So for example, if issue is very important for you, then you would spend your points to ensure that you get the lead report, or you have the lead report is from your policy. So you can frame and influence the writing of that report. Then obviously it'll be voted and other parties will have a say, but this is very important. Maybe one thing to, to also add to that is that most of the time the. People, the meps sitting in these committees are also interested and have a certain interest or a certain knowledge and expertise on, on these issues. For example, the environmental committee is notoriously populated by I would say environment enthusiast or I would say meps that a bit more on the greener side than other committees. So it's also quite in interesting to see that the agricultural committee, for example, is also quite different in its composition and probably a bit more conservative. These are important points also within the composition of the polymer itself.

Siobhan Hall, Brussels correspondent, Montel: 13:47

And if I could just add to, that's a very good point that Raphael makes. Generally speaking. In the Industry and Energy Committee and the clue is in the title the, you get people who are much more interested in industrial policy. So I can see a situation where one of, whether the I and d group or the ECR group, if they only have one chair, then they might want to go for the industry and energy committee because they tend to be interested. Industrial issues, jobs, that sort of thing. And then, or if they don't get a chair committee, they might be pushing to be a lead negotiator, a rapporteur on one of those files. But those files are obviously also interesting to the bigger groups. So it's not just they want, it means that they will get it.

Richard Sverrisson, Editor-in-Chief, Montel: 14:27

Excellent. I think. Thanks very much guys.'cause I think that's really important context before we go into the next crucial question is like, what's happening now on the ground across Europe? What is there really a danger of a lurch to the right Raphael here that we are hearing a lot about? Maybe in some countries in particular, we mentioned your home country, which is France is and potentially Italy as well. Could, there could be a danger of a move rightwards.

Raphael Hanoteaux, Policy Advisor, E3G: 14:50

Yes, definitely. I think this,

Richard Sverrisson, Editor-in-Chief, Montel: 14:52

maybe it's not a danger, it's for some, it's probably welcome, but I would say in terms of climate and energy policy, it's certainly a bit of a of a concern.

Raphael Hanoteaux, Policy Advisor, E3G: 14:58

No, absolutely. I think the polls are quite clear and it's also well known. EU elections are sometimes called second order elections. Elections where people. Vote on different parties or more opposition parties than what they would vote on national elections. This was well studied so far, and we obviously are expecting a surge in, in far right compared to the current. Composition of the European Parliament. It'll definitely depend on the countries in France. It's also something that is expected. But I will remind your listeners that five years ago the far right was also quite high, was at the same level as the macro prosperity. So it's also something that is I would say quite repetitive or not totally a new thing. In, in terms of the worries for the energy and climate legislation, I would say that it's probably a bit of a, I would say we're probably a bit overdoing it because if you look at the European parliament's power, it has the power to vote on the legislation. It doesn't have the power to recall legislation. It has the power to work on, for example, if you have review clauses, so you know, like a certain legislation was adopted and then has to be reviewed in a few years. And then the European Parliament could, undo it or decide to stop it. But the real power of basically looking at everything that was done under the European Green Deal and the fit for 55 package, for example, in the last five years, I don't think the Parliament will have the political capital and the political energy to actually. Undo all of these legislation bit by bit. It's a bit more on the ambition of the next phase of the energy and climate legislation that we might be a bit worried.

Richard Sverrisson, Editor-in-Chief, Montel: 16:30

What's your view here, Siobhan? I mean, what could the consequences be for EU climate and energy policy?

Siobhan Hall, Brussels correspondent, Montel: 16:35

Yeah as Raphael was saying. The legislation that affects power markets, gas markets, carbon markets, and energy specifically. Has already been agreed in a way that makes it difficult to change at this point, the, these set targets, which potentially might not be reached, but that's not the same as undoing legislation or going back on legislation. So I think when you see headlines that the, far right gains are going to. Derail something in the future. It's more to do with the areas of the climate and energy policy, which are not directly related to the power markets, the gas markets and the carbon markets. So the areas that we focus on, the legislation is set and one of the things that you hear from people in the industry is that now it's all about implementing the legislation that has been set. So in that sense, these European Parliament elections are not particularly. Influential over how the legislation has been agreed will be implemented. The focus is very much on national governments. National governments actually have to come this month with plans showing how they're going to achieve these 20, 30 targets for renewables. For saving energy, for reducing emissions. And that will be really interesting to see. Whether they are going to collectively meet the targets, whether they're going to fall short and how the next European Commission will handle it. Because the likelihood is they will fall short, I would say. Exactly. What do you think, Raphael?

Richard Sverrisson, Editor-in-Chief, Montel: 18:11

Is this the lovely acronym? The NECP, the National Engine Climate plants. Yeah. Yeah. Thank you. Siobhan. And Raphael, do you have something to add to that?

Raphael Hanoteaux, Policy Advisor, E3G: 18:19

Yes. No I would agree. I think we sometimes do not take the ambition or take the measure of. How ambitious was the European parliament, European Commission in the last five years in terms of legislation that was PA passed? You had thousands of pages of legislation that were agreed and now the big debate and the big challenge will really be the implementation of these regulation. And directives on the ground. And on that maybe one point where the next European Parliament would be very important is the negotiation of the next EU budget. What we call the more general financial framework in this very EU acronym style. It's the very important military general budget of the European Union. And the European Parliament has a say in how that money is is dispersed and and invested. And on this this could be important because we know that. In order to actually implement the whole package organization that was passed, you will need support from the EU and, funding.

Siobhan Hall, Brussels correspondent, Montel: 19:13

And so that's a, yeah, that's a really good point because what we hear, the main conversation these days in energy sectors is more about investment needs and money and where is the money going to come from? And actually you may find that pro industry. Groups in the Parliament might be very willing to vote for EU money to help fund these the transition. So it is not in that sense, it's not necessarily that having more pro industry parties is going to derail things now because actually it's industry that's calling for money and they generally there to try and keep, there's a focus on the EU policy now about how to keep industry in the eu, how to, and that might require funding or that will require funding and there could be political support for that in a way that because the targets and so on already agreed and they can't be changed legally, they could not be met, but they can't be changed. So if they're not going to be changed, then you may as well throw money at the problem if you can.

Richard Sverrisson, Editor-in-Chief, Montel: 20:09

But Raphael, conversely, wouldn't you say that maybe increased fragmentation in the parliament and maybe more representatives from the far right far left could block any money going to renewables or to the green sector or to green finance. Is that. Is that a legitimate fear or not at all? I see you shaking your head Siobhan, but we'll come to you later.

Raphael Hanoteaux, Policy Advisor, E3G: 20:32

As always in the eu it's a bit more complicated than that because obviously the different parliament and the college legislators will have to discuss the rules for disbursing this money. More far right or other groups could definitely make that a bit more difficult. But then the actual sum of money that is available for the EU is then decided by member states or law and by heads of states, I would say that, and maybe that's a bit of a wider subject, but I would say that anyway, also the, the reasons potential of some of these groups will also depend on how they are organized and how powerful they are. So far, the far right was. Already quite present in the European Parliament, but why it was not organized in a way that left, it left them able to really weigh in on many issues. They did not have a very coordinated approach and were not very very influential on many files. So I would say this is going to be the main point with an experiment.

Richard Sverrisson, Editor-in-Chief, Montel: 21:26

Would you agree? Siobhan?

Siobhan Hall, Brussels correspondent, Montel: 21:27

I was just thinking when Raphael was talking about the EU budget, it reminded me that national governments have a new stream of revenue or a relatively new stream of revenue, which is that they have the revenues from selling emission allowances and as emission allowances are now worth much more than they were. Five years ago, that's potentially a very large sum of money that's coming into member states budgets, which they are supposed to be spending on climate policies. And so there is the EU budget, but there is also this new revenue stream from emissions analysis, which is now much, much bigger than it would've been five years ago. And that's also one of the, one of the. Points where those who are against carbon price, those who don't want to see high carbon prices, are also having to balance that against the fact that it's also raising revenues which are being transferred to countries that have less GBP, because that was part of the agreement on getting the decision, getting agreement on setting up these kind of facilities in the first place so that's also an area that wasn't so relevant in the last Parliament.

Richard Sverrisson, Editor-in-Chief, Montel: 22:36

And the ones who have more of an uphill struggle in decarbonizing their, you know, the energy or their industrial sectors. Yeah absolutely. I think that's an important point. Raphael, Siobhan mentioned, the 2040 targets. I, is this gonna come before this parliament? And what's likely to happen here if there is this fragmented or divided parliament?

Raphael Hanoteaux, Policy Advisor, E3G: 22:56

I would say that the 2040 target is a very interesting political object at the moment. We had the 2040 proposal and communication by the European Commission on, what would constitute. Some options for 2040 Target. We know that there is the objective of decreasing around 90% the greenhouse gas emission by, by, by that date. But then the European Commission proposed a few options, from. I don't have the exact numbers in mind, from, let's say FT 85 to 95% of decolonization by 2040. What was really interesting is that this communication by the commission, linear options just came at the same time as the farmers protest, and it was hidden under the rug to a certain extent, the communication was not very clear by the European Commission. And even, we as analysts look at the data and the annexes of this communication, and you could see that some numbers were hidden or just not put there, just so that, politically it was a bit easier to talk about it. The main debate that we'll see with the 2040 target we see a very strong offensive by some countries to really. Expand the scope of what we understand with decarbonization and basically including other types of energies or energy carriers that were not there in the past. So I'm thinking about nuclear, I'm thinking about hydrogen or blue hydrogen. I'm thinking about other types of what we call low carbon energy. We, when in the past, up until now in the 2030 package for example, is really all about renewable energy and energy efficiency. And so you have this push, and this is definitely going to be a very strong battle or very difficult battle for climate supporters with the 2040 debate. And it's definitely going to be something that will be tackled by the next parliament.

Richard Sverrisson, Editor-in-Chief, Montel: 24:39

Would you agree here, Siobhan?

Siobhan Hall, Brussels correspondent, Montel: 24:40

Yes. So it's important to recognize that the communication that came out from the last commission the current commission. It's just a paper and we won't see formal legislative proposals probably until next year, and they will come from the new commission. So we don't know what the new commission will. Propose in the end. So as Raphael said, it's gonna be, it's gonna be interesting. They've got quite a lot of time, I would say, because they're slightly ahead of the curve than they normally would be for proposing a 2040 target. So even if it is difficult, they've got plenty of time, they don't have to rush it, you know, in terms of giving investments. Security or predictability, they can take the whole five years, which would be a long time to, for a particular proposal. But in this case, they've got time so they, they can do it. And it's also difficult to know what may happen in the next few years that might push either public opinion or national government elections or whatever that may change. The commission managed to persuade EU governments to get outta Russian gas. In a very, very short period of time. I've been covering this more than 20 years. I've never seen anything go through that fast. And again, like Raphael would say five years ago, no one would've thought that was possible. But when something external happened that made it tie in with those security supply and national security, it happened very quickly. It'll be interesting to see how things turn out. External influences are also important.

Richard Sverrisson, Editor-in-Chief, Montel: 26:14

Absolutely. And that sort of, it, it is a kind of a very volatile, uncertain world we live in at the moment. So that's also something to be aware of, but the, I'm sure the horse trading will begin very soon, once all the results are in. But I'd just like to thank you Raphael and Siobhan for being a guest on the Montel Weekly podcast. Thank you.