GO
Loading...

European elections: Why you should care

When it comes to sparking political passion and heated debate, the forthcoming elections for the European parliament usually fail to raise little more than a flicker of interest.

Sean Gallup | Getty Images

Nonetheless, from May 22-25, over 300 million people from 28 different countries are expected to cast their ballot in an election that will see 751 European members of Parliament (MEPs) elected. But according to research from political risk consultancy firm Teneo Intelligence released in February, most Europeans believe this vote is still considered a "second-order" contest to national elections.

This is reflected in historically low turnouts. From 1979 to 2009, voter turnout has dropped, reaching only 43 percent in 2009 and it's expected to go lower in the 2014 election.

Read More As EU elections loom, do you know your MEP?

But the European Parliament holds an increasingly important role in the lives of ordinary Europeans. Here's a quick look as to why May's elections matter.

Financial power

The European Parliament (EP) makes key decisions, along with the leaders of each 28 members, in a wide array of policy areas, from agriculture, environment, justice and energy to financial regulations and economic governance.

"In economic matters", Antonio Barroso, senior vice president at Teneo Intelligence told CNBC by phone, "the role of the parliament is important."

As well as setting spending and tax, it also has a say in trade agreements and how goods and services are sold throughout the EU's 28 countries. The parliament gave powers to the EU's executive arm, the Commission, to keep a close eye on member states' deficits and budgets, also allowing it to punish member states that fail to deliver on their economic commitments, with fines of up to 0.5 percent of their gross domestic product.

Measures designed to stop Europe from falling into another financial crisis must also pass through parliament. Its most recent vote, on April 15, the parliament approved the creation of a Single Resolution Mechanism, which will decide whether to wind down or rescue any on the banks.

Additionally, as Mujtaba Rahman, head of European research at Eurasia group, told CNBC "on things like trade, the European Parliament can be fairly influential."

Therefore, if negotiations for the Transatlantic Trade and Investment Partnership (TTIP), a free-trade agreement between the European Union and the United States culminate in an agreement, this one will have to be approved by the parliament.

Finally, its reach also extends to "anything that has to do with the internal market" explains Barroso, especially to its harmonization. Recently, it voted to end mobile phone roaming charges for European consumers, potentially robbing telecom operators of an additional source of revenues. Ministers from the bloc's member states are set to vote on the measures in October, after which they will become law.

Read MoreEU corruption risk rises as 'blind spots' exposed

Along with member countries' heads of states, the parliament must approve the EU budget each year. The budget is used to balance out the economic imbalances of the EU by investing in infrastructure projects in poorer countries. For the 2014 budget, parliament and the bloc's leaders seemed to be at an impasse as governments, hit by austerity measures at home, called for a big cut in spending. In an 11th-hour deal, they compromised on a $181.6 billion budget, about $700 million than the leaders wanted.

Rise of small parties – on the left and right

"The backdrop of the economic crisis will serve as a platform for populist parties", explains Eurasia's Rahman.

While the rise of the far-right has been widely anticipated, other small parties – including from the left – look set to win big at these elections, which could destabilize the balance of power in the parliament.

The proportional system already increases chances for small parties to gain seats. But, with the crisis still making itself felt through high unemployment levels, there is an "extra incentive to punish the ruling parties", says Barroso.

This could mean the entire parliament could shift to either the left or the right. The two mainstream parties, the centre-right Social Democrats and the center-left European People's Party, are still expected to obtain a majority, but they could choose to ally themselves to smaller parties from one end of the political spectrum in order to avoid a coalition with the other party.

Impact on national politics

"The European Parliament's real influence is actually on certain countries and their politics," highlights Rahman.

The growing importance of smaller parties will not only impact the European Parliament but also member states' domestic politics as ruling national parties brace for a beating.

In an echo to the French local elections in March, in which the ruling socialist party was severely weakened, prompting a cabinet reshuffle, several other leading parties across the EU may be forced into changing policy following the ballot.

In the Netherlands, the radical-right Party for Freedom, credited with 18.1 percent of voting intentions, is ahead in the polls ahead of the May elections, with a two-point lead over its closest competitor. This could increase pressure on the ruling Dutch coalition to repatriate powers from Brussels and tighten its room for manoeuvre regarding economic reforms at home, Teneo Intelligence explains.

Ruling coalitions in Greece and Italy could face leadership challenges as euro-sceptic parties Syriza (in Greece) and Five Star Movement (in Italy) are expected to come out either on top, or close second to their respective ruling parties.

Finally, in the U.K., a good performance from the anti-EU UKIP party, could put further pressure on Prime Minister, David Cameron, to toughen his stance on immigration and European issues.

Featured

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video