“The shift to the right will be noticeable”

Malte Kilian is Deutsche Bank’s Head of EU Government & Public Affairs . He has lived in Brussels since 2014 and maintains close contacts with decision-makers. We spoke to him about how the political climate will develop after the parliamentary elections – and why the outcome will have a direct impact on citizens and businesses alike.

Malte, what is the mood like in Brussels ahead of the European elections in June?

The past few weeks have been quite intense and hectic. Many political actors wanted to complete their projects in time for the elections. Now it’s quieter because the MEPs are mainly campaigning in their home countries. However, the Commission and the Member States are of course continuing to work.

Are you afraid of a shift to the right in the election?

There will almost certainly be. The Eurosceptic parties are making strong gains in all polls – including in EU founding states such as Germany and France.

How will this change the political climate in Brussels?

It is very likely that the pro-European forces will nevertheless retain their majority in parliament – from the European People's Party and the Social Democrats to the Greens and Liberals. The right-wing parties are therefore unlikely to win any tangible political power. Nevertheless, the shift to the right will be noticeable. More seats in Parliament means more speaking time, more posts and more money. This can be used to hijack political debates, delay processes and hinder decisions.

Why is the election outcome important for the economy?

Parliament does not have the right to initiate new laws, which is the exclusive responsibility of the European Commission. But first, Parliament elects the new Commission. And second, in addition to the European Council, it must approve 80 percent of all legislative proposals. That is why it plays a key role in determining how things will turn out in Europe. This affects businesses just as directly as it does citizens.

What will Parliament focus on in the coming legislature?

Compared to the upcoming elections in the US and UK, the European elections are less disruptive. There will be no radical political course correction. But Europe's competitiveness will come into even greater focus. For example, the Green Deal, which Ursula von der Leyen launched in 2019 as a concession to the Greens, is likely to be further developed into a "Green Industrial Deal".

What do you mean by that?

Most experts agree that the fight against climate change must not lead to even stricter regulations and hurdles for the economy. Instead, it must be about how companies can best implement the green transformation, in other words, how it can become a business case. There is a lot of pressure on politicians to move in this direction. And my impression is that the relevant players have also understood this.

And what can we expect in view of the geopolitical tensions and conflicts?

At the top of the list of priorities, of course, is to enable Europe to better defend itself – and to ensure economic and energy autonomy.

This includes a robust financial market. What is the situation in this area?

Regulation has tightened massively since the financial crisis. Partly rightly so, but now is the time to pay more attention to ensuring that Europe remains competitive in this area as well.

How would that work?

A European Capital Markets Union, i.e. an integrated capital market across the EU, would be enormously important for Europe to be able to meet the urgently needed private investment. The fact is, however, that since the first attempts at such a union in 2014, progress has remained very modest. Europe's financial market is still a patchwork quilt – which scares off investors.

Will this change in the next legislature?

There is a lot of basic support in the election manifestos – but there is a lack of concrete proposals on how the Capital Markets Union can become a reality. At the end of April, the EU heads of state and government spoke out in favour of progress – a very important sign that makes the Capital Markets Union a top priority. But it remains a generational project.

We've talked a lot about policies so far. Politics depends heavily on people and networks. How will the face of Brussels change after the elections?

Considerably! After the election, more than half of all members of parliament are likely to be new members, most of whom will bring their own staff with them. In the next Commission, too, there will be many new faces at the management levels. Anyone who is active in Brussels will have their hands full rebuilding their network. It's going to be an exciting time!