What EU Elections Mean for UK Businesses

The upcoming European elections in June 2024 matter to businesses in the European Union (EU), but they're also crucial to businesses worldwide, including those in the UK. For small business owners in Britain, especially those involved in importing and exporting goods to the continent, these elections still hold significant implications post-Brexit.

This guide provides an overview of this summer’s elections, explains their importance and discusses how the outcomes could impact your business operations.

Why European Elections Matter

The European elections are a globally significant democratic exercise, with around 373 million eligible voters from 27 countries participating. From Ireland to Bulgaria, these elections hold power to shape the future of the EU over the next half a decade.

Why This Vote Matters to Brits

How Europeans vote will influence key EU policies on climate change, migration, economic integration and more. Understanding these policy directions is crucial for British businesses, as they will affect regulations and market conditions on a broader scale.

The European Parliament, based in Brussels and Strasbourg, is critical in passing laws and distributing the EU's annual budget. For 2024, the budget is €189bn (£160bn), influencing various sectors, including trade, infrastructure and innovation.

Critical Issues for the UK

New environmental laws could emerge, affecting industries such as manufacturing and agriculture. UK businesses should prepare for potential changes in sustainability standards and regulations.

Political pundits expect that the next Parliament will reflect the recent rise of the far right across Europe. This shift could lead to more nationalist policies, potentially impacting trade agreements and regulations that UK exporters and importers must be aware of.

Changes in migration policies can impact labour markets, especially for businesses relying on European talent. Greater EU integration or a move towards nationalism would affect market access and international trade.

Voting in EU Member States

Voting in the European elections begins on Thursday, 6th June, in the Netherlands, followed by Ireland and Malta the next day. Polling stations continue to open across various nations until Sunday, 9th June.

Each member state’s voting process varies slightly. Most vote on a single day, but some, like Czechia, extend voting periods. The minimum voting age in most countries is 18, but it drops to 16 in Germany, Austria, Belgium and Malta.

In Luxembourg and Bulgaria, voting is compulsory, leading to a higher voter turnout.

Results are determined by the proportional representation system, ensuring that every vote counts when filling all 720 seats in the European Parliament.

Implications for UK Business Owners

Trade and Regulatory Changes

The composition of the new European Parliament will directly influence EU legislation. Changes in trade regulations, environmental standards, and market access rules could impact UK businesses.

New regulations on product safety and environmental impact might require UK exporters to adapt their products to meet EU standards. Shifts towards new trade agreements could alter tariffs and duties, affecting the cost and competitiveness of UK goods in the EU market. Changes in EU budget allocations could impact subsidies and financial support available for cross-border projects, which UK businesses may still benefit from indirectly.

Market Stability

The rise of far-right parties could lead to unpredictable policies, affecting market stability. You should prepare your business for potential economic volatility and wobbles in investor confidence.

Currency fluctuations affect pricing and profitability for UK exporters and importers, which hedging strategies could mitigate. Political changes can impact the attractiveness of the EU market for investors, affecting funding and partnership opportunities for British companies. Equally, the European Parliament's stance on sustainability can directly impact industries reliant on green technologies.

Strategies for British Businesses

Monitoring Developments

Staying informed about new laws and regulations passed by the European Parliament is essential. Regularly monitor EU legislative updates and be ready to adapt your business practices accordingly, ensuring that your products and services meet any new standards or regulations. This approach may require updates to product specifications, manufacturing processes or service offerings.

Joining trade associations and industry groups like the FSB can provide valuable insights and advocacy opportunities. Trade bodies will often engage with policymakers to represent business interests. By participating, you can help shape favourable trade terms and regulations.

Risk Management

Reducing reliance on the EU market can mitigate risks associated with political and economic instability. Explore opportunities in other regions, such as Asia and North America.

Financial risk management strategies like hedging can protect your company from fluctuations in the Euro's value. To stabilise costs and revenues, consider locking in your exchange rates for future transactions.

Ensuring Resilience

Strengthening the resilience of your supply chain can prevent disruptions and ensure smooth operations. Identify alternative suppliers to reduce your dependency on a single contact. It’s a good idea to make contingency plans for logistics to handle potential delays or disruptions and ensure the timely delivery of your goods or supplies.

Adopt sustainable sourcing practices for the dual purpose of meeting regulatory requirements and appealing to environmentally conscious consumers. Obtaining green certifications is a recognised method of demonstrating your company’s commitment to sustainability, enhancing your brand reputation and marketability.

Counting Up

The 2024 European elections are a pivotal event with far-reaching implications for British businesses engaged in European trade. By understanding its potential outcomes, small business owners can make informed decisions, mitigate risks and capitalise on emerging opportunities.

By staying informed and strategically planning for the potential impacts, business owners can ensure their operations remain resilient and adaptable in a post-Brexit Britain.

Financing Operational Changes

At BusinessComparison, we provide expert assistance in identifying the most suitable loans for your business. Our comprehensive comparison includes a range of business loans from reputable high-street banks to more specialised, small lenders.

Let us Help Your Business

We help you compare essential business products and services, ensuring you get the best deal and helping you with your bottom line. Save time and money with us by comparing today.

Sam White