FirstFT: Europe’s far-right makes significant gains in EU parliament elections

Good morning. We have the latest results from the weekend’s EU elections, where far-right parties have made significant inroads and are projected to hold nearly a quarter of the European parliament’s 720 seats, up from a fifth in 2019.

Emmanuel Macron stunned France by calling for snap parliamentary elections after his centrist alliance was trounced by Marine Le Pen’s Rassemblement National, which had secured 31.5 per cent of the vote in exit polls — more than double the vote share of the president’s Besoin d’Europe.

Voters also delivered a stinging blow to Olaf Scholz, with all three parties in the German chancellor’s coalition overtaken by the far-right Alternative for Germany, which came in second behind the conservative CDU-CSU opposition. Ultraconservative and nationalist parties also won or made significant gains in Austria, Cyprus, Greece and the Netherlands, exit polls showed.

In Italy, exit polls put Prime Minister Giorgia Meloni’s hard-right Brothers of Italy on top, with 26 to 31 per cent of the vote. The results will cement her position within her three-way coalition and strengthen her hand in negotiations with other European leaders.

But parties of the centre retained a majority in the new parliament, with the exit polls putting the centre-right European People’s party on track to win 189 seats, leaving the Socialists and Democrats in second place with 135 seats, with the liberal Renew group on 83, holding on to third place.

We have more on what the results will mean for Europe here, and visit our results tracker, updated continuously as more votes are counted.

• Macron’s gamble: The outcome of France’s snap polls might matter more for the EU’s future direction than the results of the European parliament vote, writes Ben Hall.

• Ursula von der Leyen: The EU’s rightward shift means the European Commission president’s path to a second term will hinge on uncomfortable choices and backroom deals.

• What comes next: Voting has ended, marking the start of a political battle and horse-trading to convert millions of ballots into money and power.

• Inside the AfD: As Germany’s far-right celebrates a strong performance, a former leader tells Henry Mance the party has lost its way.

Don’t miss today’s Europe Express newsletter, which will be free for all subscribers as Henry Foy brings you five key takeaways from the EU election. And here’s what else I’m keeping tabs on today:

• Economic data: Norway has inflation data, Italy publishes industrial production figures and Switzerland has its consumer sentiment index.

• Apple: Artificial intelligence is expected to be a big theme at the tech giant’s annual Worldwide Developers Conference in Cupertino, with an opening keynote address by chief executive Tim Cook.

• Brics: Russia hosts the grouping’s foreign ministers for a meeting in the city of Nizhny Novgorod.

How will the election change Europe? Join the FT’s experts for a subscriber webinar on Wednesday as they unpack the results’ implications for the bloc and the world. Sign up here.

Five more top stories

1. Centrist politician Benny Gantz has resigned from Israel’s emergency government and called for early elections, accusing Prime Minister Benjamin Netanyahu of mishandling Israel’s war in Gaza. In a speech yesterday evening, the former general also backed a US-led push to free the Israeli hostages still held in Gaza via a deal with Hamas, and supported a commission of inquiry into the failures surrounding October 7. Here’s how Israeli politicians have reacted.

• Hostage rescue: An Israeli military operation freed four captives in Gaza on Saturday, but the firepower used also killed and injured hundreds of Palestinians.

2. Exclusive: Labour has abandoned plans to bring back the pensions lifetime allowance, in an £800mn U-turn. Shadow chancellor Rachel Reeves has dropped the proposal from Labour’s election manifesto, to be published on Thursday, because it would add uncertainty for savers and be complex to reintroduce, her allies told the Financial Times. Here’s more on the party’s move to “de-risk” its campaign.

• Transatlantic concerns: US companies are worried that the cost of operating in the UK would rise under a Labour government, according to a top trade association boss.

• Sunak seeks reboot: The prime minister has pledged £12bn in welfare cuts in a desperate attempt to get his campaign back on track after he was roundly criticised for leaving last week’s D-Day event early.

3. Exclusive: The UK’s financial watchdog could approve the biggest overhaul of the country’s listing regime in 40 years as early as this month, paving the way for a possible announcement within weeks of the formation of a new government. The Financial Conduct Authority’s board is set to meet on June 27 when it will decide whether to approve the final version of the rules, aimed at boosting London’s ailing stock market. Michael O’Dwyer and Emma Dunkley have more details. 

4. Private equity and professional services firms face a bruising from the UK tax authority’s crackdown on businesses that operate as limited liability partnerships. HM Revenue & Customs was already probing firms and could potentially seek backdated contributions, tax experts and other people involved told the FT. Read the full story.

5. Upcoming elections are complicating interest rate decisions in the UK and the US, with central banks wanting to avoid any perception that they were cutting rates to help incumbent governments, former officials and economists said. Former monetary policymakers say the situation is particularly tricky for the Bank of England. Here’s why.

Want more on rate-setters’ battle with inflation? Sign up for our Central Banks newsletter by Chris Giles if you’re a premium subscriber, or upgrade your subscription here.

The Big Read

Google and Samsung have been leading on “AI smartphones”. Microsoft, Qualcomm and AMD have staked a similar claim to the “AI PC”. Apple, meanwhile, has yet to launch an iPhone specifically marketed for the age of artificial intelligence, and has instead had a run of bad headlines, from antitrust claims in Europe and the US to Nvidia overtaking it to become the second most valuable American company. Chief executive Tim Cook will have a chance to change this narrative when he takes the stage at the company’s flagship annual conference today. But experts say the stakes are unusually high.

We’re also reading . . . 

• Musk vs Delaware: Tesla shareholders vote this week on whether to restore a $56bn pay package for its chief executive that was struck down by the state’s court. But that won’t close the book on the legal saga.

• UK election: Neither Labour nor the Tories want a sorely needed debate about the bitter economic truths facing the country, writes Martin Wolf.

• Boeing: The beleaguered survivor of a century of turbulence in the aviation industry is facing a once-unthinkable prospect: having its debt rating cut to junk.

• French football: The operator of the country’s top two tiers is on the verge of crisis as it struggles to find a broadcaster for the coming season and clubs brace themselves for a summer cash crunch. 

Chart of the day

Hedge funds have amassed their biggest bets against Eurozone government bonds in more than two years, hitting $413bn last week, in expectation that the European Central Bank will have limited room to cut interest rates further this year.

Take a break from the news

In the latest edition of At Home with the FT, the US ambassador to the UK speaks to Gillian Tett from Winfield House, an imposing neo-Georgian building and the envoy’s official residence in London. Jane Hartley discusses her life in a fishbowl, Netflix’s The Diplomat, and the “essential” relationship between both countries.

Additional contributions from Benjamin Wilhelm