What the European economy could expect from the EP political parties

Improving competitiveness (better conditions for businesses), cutting bureaucracy, protecting jobs and supporting the green transition are just a few of the key pledges from the party groups ahead of the European Parliament elections taking place 6-9 June. 

Turning on the economic growth engine in the continent for the next five years appears to be a complicated task. The current output is little more than zero and the outlook for the next years appears to be stark, according to the IMF which states: “Europe’s medium-term growth prospects have been declining for some time.”

The last five years have seen an unprecedented pandemic, a war erupting in Europe and the bloc losing a member as the UK’s Brexit unfolded. The economy had to nurse one blow after the other, energy and commodity price hikes hitting Europe very hard, productivity lowering, while high inflation and tight monetary policy also took their toll and squeezed the continent’s output.

The accompanying cost of the living crisis set the tone for voters, according to Euronews’ exclusive poll, with their priorities grouped around economic issues, such as tackling high prices, before they go to the polls.

What comes next is not any easier, it appears, with European leaders needing to get ready to handle the increasing challenges of technological and climate change as well as demographic pressures and other issues.

What is on top of the economic agenda for the various political groups?

The majority of the groups have competitiveness at the top of their agenda, many of them are calling for the strengthening of the single market, and the removal of red tape, also believing that innovation and investment is crucial. 

EPP: More competitiveness, less red tape

The centre-right European People’s Party (EPP), the Parliament’s largest group lists restoring European competitiveness on top of its economic agenda along with strengthening the single market. 

The EPP is considering launching a “Competitiveness Strategy for Europe” and appointing a dedicated European Commissioner solely responsible to focus on what SMEs need to thrive. They also set out plans to cut red tape.

EPP group leader Manfred Weber recognised at a recent speech to the EP that more money needs to go into innovation and that bureaucracy has to be cut. “This mandate was not a good one in this regard. We increased bureaucracy.”

The group also aims to expand the number of trade agreements, including partners from Africa, and complete the ongoing negotiations for Mercosur and develop agreements on critical raw materials, a crucial ingredient of new technologies including electric vehicles.

EPP’s manifesto also names as an economic priority the safeguarding of critical infrastructure such as ports, telecommunication and energy facilities from takeovers by third countries, notably China. 

ECR: Boosting the single market and small businesses

Meanwhile, the European Conservatives and Reformists (ECR) echo some of the EPP’s priorities stating that improving competitiveness would come by revitalising industrial policy and reinforcing the single market.

According to their manifesto, the group also vows to support SMEs, slash red tape, bring back strategic productions to Europe, and support energy security, with special regard to nuclear energy and geothermal power. They are not too keen on the current form of the Green Deal, but promise to prioritise Europe’s defence and tech industry, spurring innovation and investment in cutting-edge technologies such as AI and quantum computing.

S&D: Reduce the fragmentation of the internal market and get greater fiscal integration

To improve competitiveness, the Progressive Alliance of Socialists and Democrats (S&D) also calls the strengthening of the single market an “essential priority”, and a way to reduce external dependence on key sectors and materials. 

The group also sees further fiscal integration in the bloc as a priority, including the consolidation of the Banking Union and Capital Markets Union.

“We have to create a permanent fiscal capacity, as an additional special instrument over and above the MFF ceilings [an annual limit for EU expenditure as a whole, ed.], which can protect against disruptive shocks,” said MEP Jonás Fernández, S&D spokesperson on economic and monetary affairs to Euronews Business.

Renew Europe: Better regulation and new technologies

The liberal, pro-European Renew Europe Group, the successor to the Alliance of Liberals and Democrats for Europe (ALDE) group, states that the next Commission must be an “Investment Commission,” tackling research, development and innovation to increase the EU’s global competitiveness. 

It proposes to spend 3% of the EU’s GDP on research and investment starting in 2027. (In 2022, EU research and development expenditure was 2.24% of the GDP, according to Eurostat.)

ADVERTISEMENT

Renew Europe has also highlighted that SMEs need easier access to capital. The group said in a special plan 10-point plan, released earlier this year part of the problem could be tackled by dismantling national barriers in capital markets.  

It also advocates for a dedicated Commissioner for Enforcement, whose job should be to fully enforce existing EU rules.

Group of the Greens/European Free Alliance: A wellbeing-based macroeconomic governance

The Group of the Greens/European Free Alliance foresees boosting competitiveness via green investments. The group campaigns with a “Green and Social Deal”. That is a package which promises to inject money from fossil fuel companies and other groups into green investments, thereby creating jobs and providing basic rights to everybody in Europe. Its concerns revolve around food, clean water, basic housing, cheap public transport, and energy. 

GUE/NGL: Tax corporate superprofits!

The Left group in the European Parliament (GUE/NGL) sees that rising inequalities, tax avoidance and the lack of investment in public services as the three most important issues to tackle. 

“Inequality between the rich and poor is growing,” a spokesperson told Euronews Business, adding that changes in taxing could replace the austerity measures planned currently across the bloc. “EU governments are losing out on a staggering €286.5 billion in revenue annually, equivalent to €33 million per hour, due to their failure to fairly tax Europe’s wealthiest.”

ADVERTISEMENT

With the income, the group pledges to bring a remedy to social inequalities, drive investment and fuel the green transition. They also promote adding special roles to the European Central Bank (ECB) help financing public investments at 0%, including health and education, research and transport.

The far-right Identity and Democracy group hasn’t responded to Euronews Business’ request for comment. 

Housing and jobs are key issues in Europe’s future

The fight against rising prices and social inequalities along with tackling unemployment are among the most important issues for European voters ahead of the European Parliament elections in June.

Inflation has been declining for a few months now and the European Central Bank is expected to cut the key rates in June, a sign that the bloc is on the right path. 

While some parties claim that social inequalities are largely in the power of member states to tackle, the labour market’s challenges are certainly going to stay on the table for the next European administration. 

ADVERTISEMENT

Europe is struggling with an imbalance of its labour market, with staff shortages in some industries, and surplus of skilled workers in others.

Education and other remedies for the European labour market

The EPP highlights the importance of protecting the 100 million jobs across Europe by supporting SMEs. The group also vows to create new jobs via launching an investment plan in research and development, and would spend 4% of the EU’s GDP on it. 

They pledge to “continue to combat youth unemployment” and set up  a funding programme to significantly increase the number of women-led start-ups.

To ensure the rights of workers across the bloc, the EPP also has plans to create a common European Workers’ Guarantee for the Digital Market.

To tackle the lack of skilled workers, Renew Europe is focusing on improving the match-up between education and labour market demands, and aims to reform the school system, involving companies with knowledge into the transformation, and develop specialised learning programmes, such as “Net Zero Academies” to equip job-seekers for the green and digital transitions. 

ADVERTISEMENT

S&D said: “We need to prepare workers to take part in the process of industrial transformation we are in, through the green and digital transitions”, adding that the so-called Support to mitigate Unemployment Risks in an Emergency (SURE) should be continued as a support scheme in times of crisis. 

In order to tackle unemployment by providing training and employment in the public sector, the Left group suggests bringing about a Guaranteed Employment Plan, financed by the European Stability Mechanism (ESM). 

It is demanding better employment and social rights and, for example, a reduction of working time without loss of income.

The group is also advocating for the European Basic Income Directive, a universal minimum income for all Europeans that covers the basic needs, including food, housing and energy. 

Green politicians are taking a careful stance on this matter, stating that universal basic income should be researched and studied. 

ADVERTISEMENT

The group believes that solving the climate crisis will create millions of jobs in sectors from renewables and construction to industry and transport. 

“The ‘shovel ready’ projects that we would kickstart tomorrow represent 2 million jobs in the short and medium term and our long-term transition up to 10 million,” reads their manifesto. It also believes that the mandate of the European Central Bank should be revised to include full employment alongside price stability.

Housing: ‘The EU can do more’

Housing is an increasingly serious concern across the bloc.

“On any given night, there are 900,000 homeless people in the EU, while millions struggle with rising rents in big cities,” according to the Greens/EFA alliance. They pledge to increase public and private investment in affordable housing, including social housing. “We support the introduction of rent control in cities and regions where rents have exploded to become out of reach,” read their manifesto.

S&D believes that “the EU can do more”. The group also advocates boosting public investment in green social housing and an EU plan to ensure decent and affordable housing and limiting on the privatisation of public or social housing. The group’s spokesperson told Euronews Business that it is important to ensure “decent homes for children, increase the budget of the European Child Guarantee by at least 20 billion. In addition, we should revise the Services of General Economic Interest (SGEI) with due regard to affordable housing.”

ADVERTISEMENT

The Left is calling for an EU-wide anti-poverty strategy, providing decent, affordable, and climate-friendly housing a right to all and an EU directive that caps rents. “We are fighting […] for rent caps and comprehensive tenant protection, for European funding for non-profit housing construction, and against homelessness,” a spokesperson told Euronews Business. It also suggests that investments in public housing should have support from the European Investment Bank (EIB) at 0% interest.

Green transition in Europe

The leading force in the European Parliament, the EPP has recently been accused of a backlash against the European Green Deal, a landmark set of rules to fight climate change, which it pledges to develop further in their manifesto. 

The group vows to tackle climate action whilst ensuring economic security, praising emissions trading, expansion of renewables and other low-carbon energies and creating a circular economy.

The various groups are not in agreement concerning the Green Deal. Politicians from the ECR would prefer a more localised climate strategy, saying more fund is needed before any further regulation should be decided. 

The Greens, on the other hand, have built an entirely new ‘Green and Social Deal’ to take it a lot further. 

ADVERTISEMENT

Renew Europe believes the groundwork is done, saing that “the last five years were about setting up rules, now we need to focus on implementing them.”

Food and fisheries, what’s next?

“By 2040, the EU might lose an additional 6.4 million farms, a staggering decrease of over 60% compared to 2016,” sounds the alarming message from the EPP. The group is promising legislative and financial support to farmers, including basic agricultural incomes and promotes high-tech in agriculture as one of the crucial steps forward.

Following a series of farmers’ protests, about low income and regulatory and administrative burden related to environmental protection, the European Commission recently had to softened the rules for them, including the withdrawal of a law to reduce the use of pesticides.

The EPP pledges now to provide increased support for farmers as well as fishers to adapt to the climate transition. They also advocate for a commissioner entirely dedicated to fisheries. 

Renew Europe advocates for increased support and decreased paperwork to the sector. The group believes that the biggest risk for harvests is not green rules, but climate change, and prefers remaining aligned with the overall goals of the Green Deal. 

ADVERTISEMENT

The ECR group does not. It says it respects the vital role of farmers but also aims to advance sustainability initiatives, adding it is ready to re-think some rules of the Green Deal, to “protect farmers and businesses from the negative impacts of the current European green climate policy”. 

Green claims, on the other hand, that what Europe needs is a Common Food and Agriculture Policy and massive investment in organic farming and agro-ecological production. It pledges to spend one third of the EU budget on sustainable food systems and addressing the economic situation of farmers, among others. 

“We will fight for a 50% reduction in pesticide use by 2030,” reads the manifesto.

How the energy transition is envisioned

EPP sees the way towards a carbon-neutral and environmentally-friendly future via an Energy Union, with increased development of electricity and gas network interconnections between EU member states, thus integrating further the European electricity and gas market. It also advocates for “member states to decide on their specific energy mix”. 

It is pushing for alternative fuels, saying that a rapid ramp-up of international hydrogen production is necessary in the bloc. 

ADVERTISEMENT

Additionally, it claims to have created fast-tracked permitting procedures for renewable projects. However, in a recent interview with Euronews Business, Gwenaelle Avice Huet multinational energy management Schneider Electric’s Executive Vice President of Europe, said that the development of the energy transition is behind but “it is not investments that are missing, it is the administration, that is very long.” 

The current situation results in the EU still spending €1 billion a day on importing energy, which also raises questions about the bloc’s competitiveness, she added.

Other political groups are also keen on supporting the energy transition, especially to lower dependence on fossil fuels from third countries. However, the green transition also holds strategic dependencies for Europe, in the shape of electric batteries and critical chemicals.

Renew Europe says that “we need to increase the use of renewable energy. By 2030, Europe’s energy use needs to reach at least 45% by renewables (42.5% is the binding target) and 11.7% energy consumption reduction”.

It believes SMEs have a key role in the green and digital transitions and need easier access to capital. 

ADVERTISEMENT

The ECR leaves it to each country to determine their own energy mix, however, it “strongly advocate for a technology neutral approach that champions nuclear energy and makes us a trailblazer in geothermal power”.

The Greens want to transform Europe’s energy system to rely 100% on solar, water, wind and geothermal, phasing out fossil energy by 2040, starting with coal by 2030. “We want to encourage community ownership of renewable energy projects”, they say in their manifesto. The Left is also advocating for public control and ownership of energy resources, promoting municipalities to achieve their energy sovereignty.

The Green group highlights that energy-saving measures to reduce demand are essential. Almost 40% of carbon emission comes from energy inefficient buildings in Europe. The Green group aims to allocate public money to renovate the homes of people with the highest energy bills and the lowest income. It laid out plans to focus on the development of cheap electric mobility and charging infrastructure.

Investment in the green transition

The European Union will need €1.5 trillion per year of investments to meet its 2050 net zero emissions target.

The EPP pledges to unlock investment in innovation for clean technologies with an investment plan for European jobs. 

ADVERTISEMENT

S&D believes it is important now to combat greenwashing, especially concerning investments, integrate climate risks in banking activities, and set up a new permanent investment fund, “with strong social and environmental conditionality”.

The Greens propose a major investment plan to fund green industries and infrastructure across the European Union, through a mix of changes in fiscal policy, public and private investments. 

The group would spend at least 1% of EU GDP, mainly financed by joint borrowing at the EU level, on green infrastructure projects and they envision the ECB encouraging green investment by measures, “including differentiated interest rates”.

The Greens also propose that Europe phases out all fossil fuels subsidies by 2025 and channels the remaining billions of euros into renewable energy, energy efficiency and energy savings. 

The Left is in favour of taxing Europe’s wealthiest who are “also Europe’s biggest polluters”, according to the group. It would increase public investment in the green transition, among others by the help of zero interest loans from the ECB.

ADVERTISEMENT