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3 weeks ago

EU Elections 2024: Takeaways for British SMEs

The recent European elections have led to a significant shift in the political makeup of the European Union, with far-right parties making notable gains. With only the final votes left to count, the overall direction of the 27-country union’s representation is clear. Here’s our summary of the big stories from the voting and what the results mean for small business owners in the UK.

The Winners and Losers

The most significant change is the surge in support for populist, nationalist and Eurosceptic parties, which have secured just under a quarter of the total votes together. This shift reflects concerns over migration and ongoing conflicts, which the far right has capitalised on.

This trend was particularly evident in France, where the National Rally's decisive win prompted President Emmanuel Macron to call a snap election. Similarly, Giorgia Meloni’s Brothers of Italy party won 28% of the vote in Italy, solidifying her influence on the boot and the continent. Germany saw the far-right Alternative for Germany party push the Chancellor's socialist party down into third place after earning significant support from younger voters, with 16-year-olds given the vote for the first time.

The environmentalist parties suffered significant setbacks. Changing voter priorities amidst the cost-of-living crisis and geopolitical tensions could be attributable to their decline. In Germany, the Social Democrats slumped to their worst-ever result, prompting calls for the domestic leadership to change. Additionally, Belgian Prime Minister Alexander De Croo announced his resignation following a poor result.

Despite the far-right's gains, the centre-right European People's Party emerged victorious overall. With provisional results indicating around 189 seats, the EPP is likely to grasp considerable power before the next European Parliament.

French parliament building

Impact on UK Small Businesses

For small business owners on British shores, these election results carry several implications:

  • Economy and Trade: The rise of Eurosceptic and nationalist parties could lead to more ‘protectionist’ policies from the EU, potentially complicating trade relations. British businesses that export to mainland Europe may face fresh challenges if these parties push for stricter trade regulations.

  • Regulatory Environment: The strengthened position of far-right parties in the EU might influence the regulatory framework, potentially affecting requirements for UK businesses. Ensuring you stay informed about changes will be crucial.

  • Market Stability: New political instability, such as calls for snap elections and resignations, could impact market confidence. If you operate a small business, you should prepare for volatility and consider strategies to mitigate risks.

  • Labour Market: With nationalist parties' success, changes in migration policies are likely. These amendments could affect the availability of labour, particularly if you operate a British business that relies on EU workers.

The Verdict

The European election results reiterate the shift towards more conservative and protectionist politics within the EU, which UK small business owners must navigate carefully. Staying adaptable and well-informed will be vital in managing the impact on trade, regulation and market stability.

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Sam White