Why the battle for next year’s European elections begins now

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Good morning. To start: EU capitals are fighting over a top-up to the bloc’s budget, delaying critical financial support to Ukraine.

Today, our European parliament correspondent warns us to brace for nine months of political campaigning ahead of June’s pivotal pan-EU election, and our tech correspondent reveals just how irrelevant Brussels’ anti-competition fines are to the industry’s big beasts.

The long campaign

Buckle up. The EU is entering election mode.

Ahead of the vote for the European parliament next June, which will dictate the direction of the next European Commission, come some crucial national races that will also have an impact on EU policy, writes Andy Bounds.

Context: EU voters will go to the polls from June 6 to 9 next year to decide the make-up of the next European parliament, in a vote in which analysts expect issues such as rising migration, the war in Ukraine and the fallout from the coronavirus pandemic to buoy extremist parties.

Poland, the Netherlands, Slovakia and Luxembourg go to the polls this year, and there could also be a rerun in Spain, where Socialist Pedro Sánchez held off a challenge from the right last month, leading to a hung parliament.

On an EU level, the story is one of a surge by the hard right, which entered government in Finland, Sweden and Italy this year. 

The centre-right European People’s party has already been pulled in that direction as a result. It has called for a moratorium on new environmental regulations and has also struck a tougher tone on immigration and law and order in recent months.

The most significant contest is in Poland in October. If Donald Tusk, the EPP candidate and former European Council president, can pull off a win it would repair the testy relationship between Warsaw and Brussels and possibly allow more progress on climate change, migration and other topics.

But the polls are razor-tight, and there’s just as much chance that the nationalist Law and Justice party wins another term in office.

In Slovakia the populist Smer party tops the polls for the September election. A comeback by leader Robert Fico would challenge EU unity over supporting Ukraine, giving Viktor Orbán of Hungary an ally in his criticism of sanctions against Russia.

The Netherlands race has already given us a taste of the battles to come. The replacement of Green Deal commissioner Frans Timmermans, who is leading a joint Labour/Green ticket, by Wopke Hoekstra of the EPP has stoked ire.

The Socialists in parliament have demanded that Timmermans’ climate portfolio remain in their hands. Liberal lawmakers have also criticised Hoekstra, the Dutch foreign minister, for his record on environmental issues.

He faces an interview with commission president Ursula von der Leyen this afternoon and a rather tougher audition with MEPs if he gets through that. It should prove an interesting dress rehearsal for the elections.

Chart du jour: Extreme renting

In the latest from our series on Europe’s rental market, Laura Pitel explores how housing costs in Berlin have skyrocketed in the past two decades, creating a fiercely competitive market for tenants.

All fine

The fines don’t work, they just make it worse, writes Javier Espinoza.

It only takes tech giants such as Meta and Google less than a week of revenues to pay the billions in fines so far issued against them this year, according to an analysis by Proton, the secure email service.

Context: Financial penalties are the main weapon that regulators such as the European Commission have to police rules governing corporates. So far in 2023, big tech companies have been fined $2.3bn, mostly in Europe.

But that figure that is vastly outstripped by the weekly revenues of big American tech corporations. The largest penalty this year amounted to $1.3bn, imposed on Meta for breaching privacy rules: it would take the equivalent of just four days for the social media platform to generate the revenues to offset the fine.

Similarly, Alphabet faced a $2mn fine from the French antitrust watchdog, which can be settled in just four minutes — less time than it takes to read the verdict, the analysis showed. Most of the penalties relate to infringements of either privacy rules or antitrust violations.

While the European Union handed out the highest volume of fines, Ireland emerged as the country where Big Tech has been hit the hardest because of the unusually high Meta fine. The rest of the world, including the US, has yet to impose fines on the scale of the EU.

“When a company’s market cap is the same size as a large country, the fines that are currently being issued are a drop in the ocean,” said Andy Yen, founder and CEO of Proton.

What to watch today

1. Ukrainian foreign minister Dmytro Kuleba to attend conference of French ambassadors in Paris.

2. Two-day German government retreat to discuss coalition policy begins.

3. EU chief diplomat Josep Borrell chairs board meeting of the EU’s Satellite Centre in Madrid. Statements from 1540.

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