Europe's political situation has a 'black swan' event.

The European parliamentary elections, held every five years, ended on June 9. The preliminary election results show that the far-right party is rapidly rising in the European Parliament.

Among them, the ruling party in France, the Renewal Party, suffered a disastrous defeat, with the support rate far lower than that of the far-right party, the National Alliance. French President Emmanuel Macron announced the dissolution of the National Assembly and the early holding of the French parliamentary elections. According to comments from the American Associated Press, German Chancellor Scholz experienced 'a painful night' as the Social Democrats he led achieved the worst results in history. Alexander De Croo, the Prime Minister of Belgium, and his Dutch-speaking Open Vld party lost the Federal, Regional and European Parliament elections. The right-wing party New Flemish Alliance won the highest number of votes and is likely to become the largest party in the Belgian parliament.

Analysts pointed out that the "right turn" in the election results will complicate the EU's efforts to promote new legislation or strengthen European integration. The EU's existing policies, such as the green transformation and Ukraine's resistance to Russia, may also become unstable.

Reflected in the capital market, both exchange rates and stock markets fell. The euro fell against most G10 currencies. The euro-dollar exchange rate fell 0.45% to a new low of 1.0751 in a month; the euro-pound exchange rate fell 0.4% to a low of 0.8453, the lowest since August 2022. At the same time, European stocks fell sharply after the opening with the European Stoxx 50 index falling 1.1%, the French CAC 40 index falling 2.2%, the UK FTSE 100 index falling 0.7%, the Italian FTSE MIB index falling 0.67%, the German DAX index falling 0.58%, and Spain's IBEX 35 index falling 1%.

Macron announced.

The European Parliament elections, which happen once every five years, took place from June 6th to 9th local time. Most EU member states, including France, held their votes on the 9th. French voters will elect 81 representatives to the European Parliament, second only to Germany's 96 seats.

According to Reuters on June 9th, due to the dismal defeat of the Renewal Party in the European parliamentary elections, with a support rate far lower than the far-right party National Alliance, French President Emmanuel Macron announced the dissolution of the National Assembly and the early holding of the French parliamentary elections. This is the first time that a French president has dissolved the National Assembly since 1997.

The latest electoral poll results released by the French media show that the far-right party National Alliance has won about 31.5% of votes, ranking first among all political parties in France. The ruling party Renewal Party led by Macron suffered a disastrous defeat with only 14.6% of votes and took second place.

Marine Le Pen, the President of the National Alliance, immediately responded by welcoming Macron's decision and said that her party was ready to take power after the parliamentary election results convened by Macron were released.

According to reports, in congratulating Baldra for leading the National Alliance Party to win the election, Le Pen told her supporters that the party was ready for a new parliamentary election. She claimed that if they win the trust of the French people, they will be ready to exercise their power, including ending mass immigration and prioritizing the purchasing power of the French.

Le Pen said that she lost to Macron in the previous two presidential elections. 'If the French people trust us in future legislative elections, we are ready to exercise our power. We are ready to turn the country around, defend the interests of the French, end mass immigration, and prioritize the purchasing power of the French.'

Macron said that the first round of elections for the National Assembly will be held on June 30 and the second round will be held on July 7.

The unexpected happened in European politics.

The election results show major changes in Europe's political scene.

Meanwhile, the Belgian elections also saw unexpected results. On the evening of June 9th local time, preliminary vote counting results showed that the Dutch-speaking Open Vld party led by Belgian Prime Minister Alexander De Croo lost the Federal, Regional and European Parliament elections. The right-wing party New Flemish Alliance won the highest number of votes and is likely to become the largest party in the Belgian parliament, while Vlaams Belang followed closely in second place.

The UK's Guardian quoted results published on the Belgian Interior Ministry's website, saying that in the more than 90% of the counted votes, the right-wing party New Flemish Alliance was ahead of the far-right party Vlaams Belang and was expected to become the largest party in the Belgian parliament. The Dutch-speaking Open Vld party dropped to ninth place.

Later, De Croo announced that he would resign. He told his supporters, 'This is a particularly difficult night for us, and the message sent by the voters is clear.' According to reports, De Croo choked up when he announced his resignation, and he wiped the tears from the corner of his eyes after speaking.

In the European parliamentary elections, right-wing parties in several EU member states performed strongly, with varying degrees of support rate increases.

According to the American Associated Press, Germany, which has the largest population among the 27 EU countries, saw the support rate for the Alternative for Germany hit a record high of 16.5%, an increase of more than five percentage points from 2019. By contrast, the total support rate for the three parties in the German traffic light coalition was just over 30%.

If measured by individual parties, the Alternative for Germany has become the country's largest party as never before. Analysts point out that Germany's political scene may undergo major changes, and it is possible that the Alternative for Germany may participate in (or more likely join a coalition government), and the traffic light alliance may step down.

According to the US commentator, German Chancellor Schulz experienced a "painful night" because his Social Democratic Party achieved the worst result in history.

In this election, the center-right European People's Party increased its seats from 176 to 189, an increase of 13 seats, maintaining its position as the first party group; the center-left Social Democratic Party group won 135 seats, a decrease of 4 seats; the Alliance of Liberals and Democrats for Europe group won 83 seats, a decrease of 19 seats, losing nearly one-fifth of its seats; the Green Party won 53 seats, a decrease of 18 seats, and the left alliance group won 36 seats. Cable News Network reported that far-right parties are expected to win 150 seats in the European Parliament of the 720 seats.

How significant is the impact?

During a televised speech, Macron said that the results of the European Parliament elections are "not good news" for parties that defend Europe.

The European Parliament is one of the three institutions of the European Union, and it is the only institution in the European Union that is directly elected by voters. The number of seats in the European Union's 27 member states is allocated according to the country's population. The European Parliament votes on the European Union's policies and legislation related to immigration, energy, climate change, etc., and participates in the approval of the European Union's annual budget.

This European Union election comes at a time when voters' confidence in this group of about 450 million people is being put to the test. According to US commentators, this European Parliament election is a major test of the confidence of EU voters. Over the past five years, the European Union has been hit by a series of crises such as the coronavirus pandemic, economic recession and energy crisis. The "right turn" in the election results may make it more difficult for the EU to pass legislation and hinder decision-making.

Analysts pointed out that the "right turn" in the election results will complicate the EU's efforts to promote new legislation or strengthen European integration. The EU's existing policies, such as the green transformation and Ukraine's resistance to Russia, may also become unstable.

On the market front, the euro fell against most G10 currencies, while the dollar rose as investors weighed the impact of the European Parliament elections. The euro-to-dollar exchange rate is now down 0.45% at 1.0751, the lowest in a month.

OCBC Bank strategist Christopher Wong said that from online observation, the risk of the European elections is still uncertain and deserves close attention. This is because the rise of extreme right-wing sentiment in Europe over the past decade has shown that it may weaken the euro.

Just now, European stocks opened generally lower, with the Euro Stoxx 50 index down 1.1%, the France CAC40 index down 2.2%, the UK FTSE100 index down 0.7%, the Italy FTSE MIB index down 0.67%, the Germany DAX index down 0.58%, and the Spain IBEX35 index down 0.29%.

Editor/new