European Parliament elections: Will the results strengthen technology regulation or its competitiveness?

The European Parliament elections produced a clear majority in favour of strengthening technology regulation. Is this in line with Europe’s crusade for competitiveness?

The centre-right European People’s Party (EPP) emerged stronger. Its electoral strength allowed it to re-elect German Christian Democrat Ursula von der Leyen for a second term as president of the European Commission.

While von der Leyen has prioritized the green and digital agendas (both of which are likely to hinder growth in Europe), voters are demanding a different path. One common thread is the fear of Europe’s falling behind in competitiveness. In 2008, the EU and the US enjoyed roughly the same GDP—over $14 trillion—but in 15 years, the US has almost doubled its economic output to $27 trillion, while the EU has barely grown to over $16 trillion. Major competitiveness reports by Enrico Letta and Mario Draghi (both former Italian prime ministers) have sparked debate across the political spectrum.

What will help Europe catch up is proving a divisive debate. The EPP is pragmatic and pro-business. Expect it to continue to advocate for policies that support growth and innovation. At the same time, the EPP wants to rein in Big Tech. It advocates tough regulations, such as the Digital Markets Act, targeting the big US tech companies that Europeans use to access the single market.

This approach is hypocritical. While the EPP supports business interests, it veers towards protectionism. It seems more interested in the interests of European officials than in developing a broad technology ecosystem.

Another key takeaway from the election is the growing popularity of far-right parties. They have already taken power in Italy and could soon form a government in France. Marine Le Pen’s RN won a record number of votes in the first round of parliamentary voting, amid the near collapse of President Emmanuel Macron’s centrist party. Le Pen and other far-right parties have made significant gains in the European Parliament, becoming the third-largest political group.

The far-right has taken issue with the Digital Services Act, which aims to crack down on illegal online content ranging from hate speech to dangerous toys and cosmetics. Far-right figures including Belgian MEP Tom Vandendriessche and French National Assembly MEP Mathilde Androuët say the DSA needs to clarify its definition of hate speech, making it easier for them to criticise immigration.

The far right has historically been skeptical of European integration. Expect hostility toward foreign technology, whether Chinese or American. Expect hostility toward attracting foreign talent to Europe, which is crucial to fueling tech startups.

On the other side of the political spectrum, the Pirate Party, known for its strong stance against digital advertising, suffered significant losses. It dropped from three seats to one in the Czech Republic (where it has historically been one of the more popular parties). Prominent lawmaker Marcel Kolaja, who was considered as a candidate to be the next Czech European Commissioner, did not win his seat. Similarly, the German Pirate Party representative Anja Hirschel was not elected.

Pirate’s losses suggest that voters have failed to win over voters with its niche focus on digital privacy and open operating systems. Fundamental economics have become their priority.

The strengthening of the pro-business EPP, coupled with the loss of seats to tech-focused MEPs and the rise of the anti-regulatory far right, suggests that European politicians may be wary of drastically increasing intervention in the digital economy. The emphasis will be on enforcing existing laws.

Let’s hope there will be room for a substantive debate on a positive vision for European technology policy. The continent needs a balanced approach that encourages innovation and investment while protecting citizens. This means finding mechanisms to improve single market integration and overcome the opposition of the far right. It also means attracting the best talent and venture capital, perhaps by taking advantage of the anti-Trump backlash.

The elections for the new European Parliament are just the first step. Political parties and national political leaders will now negotiate to determine top jobs and committee seats. So far, centrists have won key leadership roles: Commission President von der Leyen, foreign policy chief Kaija Kallas and European Council President António Costa. The far-right, while threatening to seize power in Paris, has been kept out of power in Brussels.

Europe’s leaders must nurture a strong and competitive European technology sector. Only if Europeans have access to the world’s best digital tools can the continent close the competitive gap.