How European elections in 2024 could affect businesses

Last updated: 19 February 2024 Views: 1291
How European elections in 2024 could affect businesses

2024 is shaping up to be the busiest election year in history. While the US election is no doubt the centrepiece of the global calendar, there are elections in dozens of countries that could significantly change the face of local, regional, and global politics. This includes Europe, where several key elections could see major shifts in policy.

The European Parliament election is perhaps the most momentous, but national elections in the UK, Finland, Austria, and Belgium (and further afield, the United States) could all help to shape the future of the continent. Here’s a rundown of the most notable European elections in 2024, and what impact they might have on the futures of European businesses.

The EU Parliament

The European Parliament elections in June present the most obvious potential for change for businesses, albeit in the medium to long term. The European Parliament has power over pan-European legislation, as well as how the EU’s budget is spent. This includes things like development grants, which often boost underfunded areas, such as its past spending in Wales and Northern Ireland. All of this has a direct and indirect impact on businesses across the continent - dictating everything from product standards to broader trade policies.

As with many elections around the world at present, right-wing populist factions appear to be on the rise. The number of parties and blocs in the European Parliament means that it is difficult for any extreme voices to gain control, but this does not mean there isn’t the potential for the makeup of the Parliament - and its general direction - to change. Recent years have seen the weakening of policy proposals around environmental protections as a result of discontent in member countries, most notably the EU’s Green Deal. This could lead to electric car deadlines being pushed back, affecting the manufacturing sector.

Related article: Guide to starting a business in Europe

There’s also the potential for greater trade protectionism. The UK has already been on the receiving end of harsh tariffs after leaving the Union, but it's possible that other countries would suffer if new or strengthened factions decide that Europe’s manufacturing and production capacity need to be protected. Conversely, the opposite could happen for the UK: German politicians have already queried the high tariffs on cars made in the UK as an impediment to electric car production, and stronger business interests (or like-minded EU sceptics) could weaken these tariffs.

There are also major decisions to be made around military policy. A series of conflicts have led to a feeling of global instability, with countries including the UK and Sweden openly discussing the prospect of conscription. Combined with the ongoing migration crisis, this could see increased spending on border security and militarisation, which may impact budgets elsewhere - particularly in expendable areas such as research & development. For all of this, the continued economic sluggishness of major EU economies such as Germany means the Parliament as a whole will be keen to further the interests of businesses.

National elections in Europe

A series of national elections in key countries will also impact many European businesses. The highest profile of these is the EU’s highest profile exit: the UK. A General Election is due before January 2025, and is likely to be called in the autumn. All signs point towards a Labour victory, which may herald slightly warmer relations with the EU. More pointedly, it’s likely to result in significant investment in green policies, and investment in a variety of public services, likely funded by some kind of windfall tax targeting energy companies, and greater taxation of tech corporations.

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The Austrian elections are likely to fall around the same time, and could have major ramifications for the power balance in the EU and relationships with its neighbours, with the right-wing populist FPÖ party topping polls, and the Communist Party also polling surprisingly high. Finland is likely to be less revolutionary: the first round of voting has already taken place, and a runoff looks set to confirm a majority for the centre-right party, with the Green Party in second, boding well for business in general, and potentially for green investments. Elections in Belgium in May look likely to produce another coalition government, though whether this is another centre-left coalition or a more centrist one is hard to predict.

US presidential election

This one needs no introduction. The outcome of November’s election will have broad economic and geopolitical implications, impacting everything from trade deals to military policy to energy security. A change in administration could mean significant shifts in regulations and foreign policy, affecting business strategies around the world. Polls suggest a tight race, with the genuine possibility that Donald Trump may be elected for a rare non-consecutive second term.

The perception of President Biden as being too old for the role (despite Trump’s own venerable age) has dovetailed with his relative lack of popularity with younger Democratic voters, particularly in the wake of the war in Gaza. At the same time, a series of global crises have led to economic issues that have affected many people across the U.S., with rising prices for petrol and consumer goods. Trump meanwhile has been apparently unaffected by his multiple lawsuits, with his defenders dismissing the various allegations as politically motivated.

Related article: 5 Tips for Doing Business in Europe as an American

A Trump election would be as chaotic for global business as the previous one. Another period of protectionism would seem likely, with tariffs and a focus on American industry likely preferred to any substantive trade deals. A lowering of standards and diminishing of consumer protections is also likely as a means to benefit American businesses, but one which will make exporting to the U.S. more difficult - and potentially disadvantage UK businesses if talk of a U.S. trade deal is revived.

Tips for European businesses

The political winds of 2024 might seem unpredictable, but many would suggest it’s been a turbulent few years! As always, there are ways to not just navigate the turbulence, but ride the waves to sunnier shores.

  • Stay informed: Monitor election campaigns and track policy proposals to understand potential impacts on your sector.
  • Diversify your markets and partnerships: Reduce reliance on any single country or political bloc to mitigate the risk of policy changes.
  • Engage with policymakers: Direct your marketing efforts to make your voice heard, and advocate for policies that support your business and the broader European economy.
  • Build resilience: Ensure your business can adapt to changing regulations and market conditions.

Adaptability and agility are vital to navigate any political uncertainty. And remember that above all else, the information above should only be a starting point for your own strategic planning. As the election season heats up, it’s worth keeping track of the elections that most affect your business as they develop - helping you make informed decisions to secure your business's future in a rapidly changing world.
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