Europe - The Political Centre Is Holding Amidst The Rise of The Right
Last weekend was marked by a number of positive developments on the European political front, which could be broadly characterized as victories for the centre-right establishment, in the context of growing right/far-right pressure.
In Romania, where the presidential election has been dogged by electoral interference (apparently from Russia) and the first round of the presidential election had been annulled, the pro EU, liberal candidate Nicosur Dan has come from behind in the polls to beat George Simion, who is widely seen as being anti-EU and pro Russia. The Romanian and EC establishment will breathe a sigh of relief at the Dan victory and he is likely to prove a more dignified, intellectual presence than some of his rivals (he was a two time maths Olympian). The risk was that Romania would slip into the same trap as Slovakia and Hungary, but there appears to have been a strong mobilization of the youth and pro EU vote. Dan now needs to build a parliamentary coalition to tackle a very difficult economic situation, with the budget deficit nearly into double figures.
The first round of the presidential election in Poland was closer than expected, with Rafał Trzaskowski, the current mayor of Warsaw and Civic Platform candidate gaining 31.5% of the vote just ahead of the far-right PiS candidate Karol Nawrocki. Nawrocki's campaign had been error strewn, so he did well to secure 29% of the vote. This sets up a show down between the two candidates on June 1st, and the close vote is a risk factor for the prime minister Donald Tusk who cannot afford to have Nawrocki in place as president (this would block the social, judicial and institutional reforms Tusk wants to put in place). While the vote is a shot across the bows of Tusk, he and Trzaskowski will now likely make concessions to other unsuccessful candidates and their constituents.
In Portugal, a snap general election has produced a picture of the political spectrum seen in other EU countries like Germany, and heavily coloured by the issue of immigration. The right-wing Chega party, formed in 2019, has surged in polls to just under 23%, slightly behind the Socialists who have lost 20 seats, and both of those behind the Democratic Alliance (AD) party, (33%). The AD will likely form the next government but will need the tacit support of the Socialists, whose leader has now resigned. This sets up a difficult few weeks in terms of government formation, as the tendency in the AD is to move to the right.
Last weekend, in France, the Republican party has elected Bruno Retailleau as its leader and likely candidate for the 2027 presidential election. Retailleau does not have a convincing chance of winning that election but in the context that Marine le Pen will likely not be a candidate, his election at the head of the LR kickstarts that election campaign. In our view, because Retailleau is seen to be tough on issues like immigration and crime, it will push Edouard Philippe further to the right, and make him the candidate to beat.
The UK and EU have struck a broad agreement in a significant political move that helps to heal some of the anguish caused by Brexit and recognizes the Britain's drift back towards the EU in the context of the new foreign policy of the Trump administration. The summit on Monday 19th centred for the time being around a defense pact, cyber security cooperation and joint defense investment/procurement, EU access to British waters for fish. Then there are a number of elements that were not formally agreed on but where it is expected that ongoing talks will provide an outcome (the use of EU border controls by UK citizens, freer movement of students between the UK and the EU and a more 'clean' set of rules on the export of British food). The mood music around the announcement was generally very positive and the sense is that this is a diplomatic process that will grow in time.
All in it was a good week for the EU – relations with the UK are the best they have been in eight years, Romania is back in the 'fold', the centre will hold in Portugal and it seems in France, though the presidential election in Poland demands watching.
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