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EU Spotlight – Competitiveness Compass: A-Z Sector Guide

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Get ready to engage in a series of policies coming from the EU to ensure that the European markets respond to your business needs when it comes to reducing regulatory burdens and achieving a more business-friendly landscape. The first legislative proposals are dropping on 26 February 2025!

On 29 January 2025, the European Commission published its Competitiveness Compass, a major strategy aimed at boosting Europe’s economic strength, reducing regulatory burdens, and reinforcing its global competitiveness. The plan, promised by European Commission President Ursula von der Leyen, builds on the Draghi Report’s recommendations, calling for urgent action to address Europe’s productivity gap, investment challenges, and economic dependencies. The Compass calls for stimulating innovation, streamlining regulations, and reinforcing Europe’s industrial and technological leadership. The end goal is to ensure that the EU remains competitive, while maintaining its commitments on sustainability and digital transformation.

The Competitiveness Compass is structured around three key priorities:

  • Closing the innovation gap through better support for start-ups, venture capital, and R&D investment;
  • Ensuring industrial decarbonisation aligns with economic policies, supporting clean technology and sustainable manufacturing;
  • Strengthening Europe’s strategic autonomy by securing supply chains, reducing reliance on third-country suppliers, and ensuring access to critical raw materials.

To achieve these objectives, the European Commission has signalled it will introduce simplification measures, will increase efforts to integrate the Single Market, improve financing access for businesses, and will improve policy coordination between Member States.

For businesses, the Competitiveness Compass brings the hope of reduced red-tape, better access to finance and streamlined compliance procedures. However, achieving this goal will require businesses to speak-up and help shape the policies to ensure that policy ambition is matched with market reality.

With the first legislative proposals dropping on 26 February 2025, Europe’s businesses will need to be prepared to respond to and get involved in consultations, while tweaking their operational strategies to stay ahead. This is a chance to shape the rules, cut through the red tape, and turn policy shifts into new growth opportunities. The regulatory landscape is evolving, make sure you’re ready to move with it!

Here is our highlight of some of the flagship policies broken down by sector (please note all dates provided hereunder are subject to change):

Agri-food: the EU is working toward a long-term Vision for Agriculture and Food Production – setting vision for 2040 and guiding EU action as well as the reform of the Common Agriculture Policy. Accounting for around a third of the EU’s budget, CAP reform is no small task! This communication will need to balance competitiveness and sustainability, while also supporting food security and the resilience and profitability of farming as a profession. The leaked document suggests that farmers are not favoured for additional funds to support the yield losses they will need to bear from using less pesticides. Rather, it seems the EU may put measures in place that would squeeze the agrifood value chain margins, with consumers possibly paying the price.

With the push for organic and agroecological farming being coupled with the much awaited Bioeconomy Strategy and an underlying assumption that organic is safer, agrochemical companies will have an interest in defending the reputation of their technologies. They may want to also ensure that the EU understands that organic doesn’t always mean safer or better. Agri-food players will have an interest in ensuring that the EU also understands the compromises in efficacy and yields and therefore the potential implications for the EU’s food imports.

The Biotech Act covering genetically modified crops grown for human consumption and animal feed as well as their import, is finally coming. With pressure to ensure that the same standards apply to imported crops as those grown in Europe, this piece of legislation will have far reaching implications including for Brazilian growers exporting GMO soybean into Europe as well as agrochemical, seed and value chain players. It will also cover bio-based fertilisers.

Chemicals: the fundamental pillar of the EU’s chemicals legislation, REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) Regulation, is being revised! The Commission will make a proposal this year and is expected to streamline chemical safety assessments and improve decision-making on hazardous substances. Questions remain over how it will balance consumer safety, environmental protection, and industry competitiveness and if ideological motives will prevail over market considerations. With REACH regulating the manufacturing and management of the use of chemicals, this will have a far-reaching affect from the ingredients used in paint to those used in cleaning products and pesticides. Will the EU become even more engrained in its hazard-based approach, or will it allow science to guide the level of exposure that would pose a risk to health?

Defence: the European Commission and the European External Action Service are preparing a White Paper on the Future of European Defence. The EU has been stepping up its work on defence by releasing the first ever European Defence Industrial Strategy in March last year, having its first-ever Commissioner for Defence and Space (Andrius Kubilius) and with the European Parliament’s subcommittee on Security and Defence having been upgraded to a stand-alone Committee. If it will yield a European Defence Union and the procurement rules that will be accompanied are yet to be seen. Given the proposed allocation of €1.5 billion from the EU budget until 2027 that’s already on the table, the way the Competitiveness Compass directs EU efforts to enhance industrial capacity, establish a Single Market for defence, and improve SME access to finance will be crucial. As the EU strives to create a European defence industry, it will need to balance ambition with the willingness of Member States to play ball.

Energy: the Affordable Energy Action Plan, set for Q1 2025, will introduce measures to increase access to low-cost energy for households and industrial consumers, ensuring energy affordability while supporting the EU’s green transition. Additionally, the Electrification Action Plan and European Grids Package, expected in Q1 2026, will focus on expanding and modernising electricity grids to accommodate increased demand for renewable energy, storage solutions, and cross-border electricity trade. These efforts will be complemented by the New State Aid Framework, due in Q2 2025, which aims to facilitate investment in clean energy projects and industrial decarbonisation. The private sector will want to keep a close eye on which technologies will come out on top as being considered as greener.

Environment: the Clean Industrial Deal is expected to be the first announcement and will come at the end of this month. For all those companies who have said their innovations can help drive a more sustainable Europe – this one is for you! And if you feel that the sustainability contributions of your innovations and products are not being sufficiently understood, now is your time to speak up and explain. This piece of legislation aims to enhance the competitiveness of Europe’s net-zero industries while expanding manufacturing capacity for green technologies, from hydrogen and chemicals to biotech and nanotech. It is expected to announce financial support while also enabling clean trade relations. It is yet to be seen if it will genuinely enable Europe to lead the clean-tech race. Especially given that other global markets like the USA, China and India are already leading with massive investments in clean technology and less regulatory barriers. Also, how the deal balances a pro-industry and pro-trade approach with environmental considerations will determine if it enhances or curtails EU markets.

The Circular Economy Act, set for Q4 2026, is expected to focus on investment in recycling capacity, encourage the substitution of virgin materials with secondary raw materials, and reduce landfilling and incineration. This will be accompanied by the rollout of eco-design requirements for key consumer products, and should align with existing legislation including the heavily-lobbied Packaging and Packaging Waste Regulation, as well as the Waste Framework Directive, which is currently undergoing inter-institutional negotiations. The pressure will be on the Commission to stick to its promise of less regulation for businesses, whilst also reducing Europe’s reliance on third countries especially when it comes to the market for waste and secondary raw materials. It is yet to be seen how the EU will balance ambition with realism and the financial incentives that will be introduced to support the way circular economy principles are brought to life.

Health: the emergencies brought on by the Covid-19 had a profound impact on health policymaking during the previous mandate, with the establishment of HERA and a key revision of the Pharmaceutical Legislation kicking off with aplomb. This new mandate seeks to take things a step further and has promised to deliver a Critical Medicines Act within 100 days of taking office. The Act, which will in large part take notes from the work of the Critical Medicines Alliance, which is currently finalising its strategic report. In this sense we can expect the act to focus on securing supply chains for key medicines, reducing dependencies, and addressing certain market failures to avoid the shortages which were felt at the height of the pandemic. This will include measures to strengthen Europe’s pharmaceutical production capacity and reduce reliance on non-EU suppliers, especially for API manufacturing and generic medicines production. Later during this mandate, with a view to bolstering of its leading sectors and key area of expertise, the Commission is expected to put forward a European Biotech Act in 2026. Together with the EU Bioeconomy Strategy – which will focus on expanding the bioeconomy market – the Biotech Act will provide a framework for health technology assessment and clinical trials for biomedicines.

Tech and digital: 2025 will be a landmark year for this space, with the Apply AI and Data Union strategies planned for Q3, and the Digital Network Act for Q4. ‘Apply AI’ will seek to boost new industrial uses of AI in key sectors including manufacturing, energy, pharmaceuticals, and financial services. The Data Union will facilitate the secure sharing of private and public data, which will help bring AI applications to life. The Digital Networks Act will aim to create the market and regulatory conditions necessary for the Union to update its digital and telecommunications infrastructure to improve connectivity for end-users and ensure European companies have the framework necessary to close the innovation gap. In parallel, this year the Commission will also seek to build on one of Europe’s core industrial strengths, building on the success of the Chips Act, the Quantum Strategy and Quantum Act (planned for Q2 & Q4, respectively) will address regulatory fragmentation and support further investment in European quantum computing to help better leverage the opportunities afforded by new tech.

Transport: a Sustainable Transport Investment Plan, expected in Q3 2025, will introduce measures to support investment in charging infrastructure and the production and distribution of renewable and low-carbon transport fuels, eagerly expected by hard to abate sectors like shipping and aviation. These efforts aim to accelerate the transition to greener transport, while ensuring affordability and accessibility. Additionally, the Industrial Action Plan for the Automotive Sector, set for Q1 2025, is expected to propose supply and demand-side incentives, including measures to encourage the greening of corporate fleets and a potential EU-wide subsidy scheme to improve competitiveness in the sector. The ongoing Strategic Dialogue on the Future of the Automotive Industry will certainly feed into this initiative, although heated debates are taking place on whether to amend the current emissions standards for cars and vans (particularly the targets and penalties for 2025). Finally, expectations are high from both industry and citizens for the Commission to deliver on its flagship rail initiatives, namely the consolidation of European high-speed network and Single Digital Booking and Ticketing Regulation.

Stay Ahead: CEE Outlook Report 2025

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CEE region

The CEE region has experienced a significant political transformation, with over 10 elections in the past year. As we enter into 2025, the landscape is set to become even more eventful and turbulent, with economic issues and political instability taking center stage. 

Key Political Developments in the Region

Poland is focused on enhancing European security during its EU presidency. Romania prepares for a rerun of its presidential election amidst economic woes and rising nationalist rhetoric. Serbia faces U.S. sanctions and widespread protests, symbolizing discontent with the ruling establishment. Ukraine, under the shadow of ongoing conflict, hopes for negotiations with the return of Donald Trump to the U.S. presidency. 

Against this backdrop, Grayling’s Public Affairs teams from Central and Eastern Europe have prepared the latest iteration of Grayling’s CEE Outlook Report. This year’s edition offers key details and insights for 2025 and beyond, focusing on what potentially awaits businesses amidst these challenges.   

Comprehensive Insights Across CEE and Beyond

Encompassed in the CEE Outlook Report, you will find crucial insights from Bulgaria, Croatia, Czechia, Hungary, Poland, Romania, Slovakia, Slovenia including the EU candidate states Serbia and Ukraine. Given the overall context and significance of Trump’s election in the Oval Office, our U.S. experts have contributed a special piece on American policies and their potential impact on CEE markets.  

Navigating today’s unpredictable landscape requires informed decision-making. Our latest CEE Outlook Report delivers the information you need to stay ahead. 

Download the full report to find out more.

 

CEE

FMCG in 2025: Navigating the policy minefield

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FMCG Packaging

When Sir Keir Starmer took office last July there was no illusion that FMCG policy would take centre stage amidst a cost-of-living crisis and the highly-politicised debate around migration. However, as the Government enters its first full year of office there are plenty of watchouts for the industry – from an ambitious new Food Strategy to sweeping recycling reforms that could reshape the FMCG sector as we know it.

Pressures squeezing the bottom line

As we are all aware business currently faces a difficult economic backdrop; the Chancellor’s Autumn Budget did little to lift the spirits of FMCG retailers and manufacturers. A hefty increase in employer National Insurance (NI) contributions from April is set to add an estimated £5bn to annual operational costs, tightening already squeezed profit margins in 2025.

But this is just the tip of the iceberg. The introduction of the Extended Producer Responsibility (EPR) scheme will add yet another £3bn to the sector’s overall financial burden this year  – all while the Government grapples with the issue of illustrative base fees, leading to concerns amongst multiple material sectors and packaging users who have pointed  to disproportionate cost increases and market distortions.

All of this is playing a significant role in fuelling consumer inflation, which could explain the Government’s silence on the modest (and surprising) news of UK inflation being downgraded to 2.5% in December. There may be concern in No.11 that taking too much credit now for policy impacts in this space   would leave Rachel Reeves in a tight spot should we see inflation rises later this year when new NI rises and EPR payments begin to take shape.

National Food Strategy

One thing that was certain when Labour came into office was their ambition to deliver comprehensive, hard-hitting reforms around food.  The manifesto’s commitment to ban the sale of high-caffeine energy drinks to under-16s was a rare example of a  specific intervention in a document that intentionally lacked direct policy commitment, while a consultation to extend the Soft Drinks Industry Levy (SDIL) to milk-based drinks was issued alongside the Autumn Budget.

The cornerstone ambition to deliver a long-term Food Strategy to create a ‘healthier, fairer and more resilient food system’ – which Steve Reed has committed to publishing  in 2025 – is the culmination of Labour’s commitment to take a more rigid approach to food security and public health.

Of some comfort is Reed’s confirmation that the Strategy will be developed in partnership with industry, which could lead to a balanced approach where higher taxes for HFSS products aren’t viewed by government as the ‘silver bullet’ to tackle the obesity crisis. Health Secretary Wes Streeting has previously backed this approach, suggesting a high tax burden on HFSS products would disproportionately impact poorer families.

However, with the Government focused on revenue raising, the Food Strategy represents a landmark moment in understanding how Labour will marry health outcomes with the cost of living crisis. On timings, it seems likely the Government is keen to get over the EPR hurdle first before facing the next HFSS battle, so while there might be limited progress in H1 – now is the time for businesses to prepare and align internally on their red lines for future food policy.

Circular Economy Strategy

As we head into the first half of 2025, all eyes are on the Government’s delivery of a comprehensive Circular Economy Strategy – supported by the unveiling of Defra’s Circular Economy Taskforce in December, chaired by Andrew Morlet, former Chief Executive of the Ellen MacArthur Foundation.

Of particular interest will be the  approach taken to Simpler Recycling and the rollout of Deposit Return Schemes in light of major supermarkets urging a delay to the 2027 timeline. Still, the Government’s efforts to integrate various waste and resource policies into one cohesive plan is a step in the right direction – and one that industry has long called for.

But the big question remains: how much long-term vision will the Strategy offer? While the immediate focus will be on delivering the EPR, DRS, and Simpler Recycling reforms, the FMCG sector will be watching closely to see if the Strategy lays the groundwork for a future-focused reuse system.

How soon can we expect a truly circular economy? The answer will likely determine the long-term success of these ambitious plans.

The Bottom Line for FMCG

The policy landscape for the FMCG sector in 2025 is shaping up to be complex, unpredictable, and packed with opportunity – if you know where to look. From  inflationary pressures to sweeping food policy reforms and circular economy initiatives, it’s clear that 2025 will be a pivotal year for the sector. Navigating these changes will require strategic foresight, industry collaboration, and a clear understanding of how new policies will impact your bottom line.

To speak to our FMCG sector specialists about how we can support your business during a year of significant policy change, please contact Michael Broughton (michael.broughton@grayling.com).

European Parliament set for overhaul as four new committees are established

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By Marc Planas & Charles Patterson | Brussels, European Union

During the Plenary Session held last week (20-23 January), the European Parliament announced the much awaited composition of four new committees: the upgraded Committees on Public Health (SANT) and Security and Defence (SEDE), as well as two special committees to deal with housing (HOUS) and the so-called ‘Democracy Shield’ (EUDS). This announcement follows the vote in late 2024 which officially created the committees, following the recommendation by the EP’s Conference of Presidents.

The committees of the European Parliament play a key role in shaping the institution’s stance on legislative proposals. They draft positions, prepare own-initiative reports, host expert hearings, and oversee the activities of other EU institutions and bodies, among other responsibilities. Following these changes, the Parliament will now operate 22 fully-fledged committees, two subcommittees (whose work is overseen by a ‘parent standing committee), and two special committees. Many of these committees will be chaired by members of the centre-right EPP group, the largest political group in the EP.

Defence and health in the spotlight to address key challenges

With this reform, both SEDE and SANT will cease to be subordinate to their ‘parent’ committees on Foreign Affairs (AFET) and the Environment, Public Health and Food Safety (ENVI), respectively. These will see their mandates adapted to reflect the new changes.

The decision to establish a committee on defence highlights the urgency of strengthening Europe’s security architecture in light of Donald Trump’s return to the White House and an uncertain outcome for the war in Ukraine. SEDE has taken on an expanded mandate to address critical aspects of the EU’s Common Security and Defence Policy (CSDP) and related defence-focused initiatives. This includes overseeing threats to the EU’s territorial integrity, managing civilian and military common EU missions outside its borders, and framing a unified defence policy among Member States, among others. The committee will also be tasked with monitoring and implementing defence research, fostering innovation and joint production, addressing hybrid threats, enhancing Europe’s defence industry and cyber-defence capabilities, an advancing military mobility infrastructure. The upgrade also comes shortly after the nomination of the very first European Commissioner for Defence, Andrius Kubilius.

Likewise, SANT’s upgrade follows extensive work by the European Parliament in the previous legislature to be more involved in health matters in reaction to the COVID-19 pandemic, as well as the work carried out by the former special committee on Beating Cancer (BECA). To wit, SANT will focus on key areas such as pharmaceutical products, medical devices, public health programmes, and preparedness for health crises. The EPP had strongly advocated for strengthening the SANT subcommittee to bring greater attention to health-related issues, which they argued were being overshadowed within the broader Environment Committee.

The move to establish SEDE and SANT as standing committees was not without controversy, however, as their new and expanded roles were met with some scrutiny and resistance from other political groups. Members of ENVI in particular expressed concerns that separating health issues from environmental matters could undermine the cross-sectoral approach to public health. As a compromise, food security and animal welfare will remain under the Environment Committee, which will be renamed the Environment, Climate, and Food Safety Committee.

Special committees to meet new challenges: foreign interference and rising home prices

The European Parliament also decided to set up two special committees on the ‘European democracy shield’, and on the housing crisis in the EU. Each committee will consist of 33 members and have an initial mandate of 12 months, which can be renewed. This temporary format is not new, as Parliament has previously formed committees to tackle issues such as organised crime, corruption, money laundering (CRIM), or the EU’s response to the COVID-19 pandemic (COVI).

The ‘European Democracy Shield’ special committee will focus on combating foreign interference and information manipulation, aligning with the Democracy Shield initiative outlined in Commission President Ursula von der Leyen’s 2024–2029 political guidelines.

For its part, HOUS’s creation comes amid a sharp rise in housing costs, with average rent prices increasing by nearly 23% and house prices by almost 48% between 2010-2024. Although the EU’s competences in housing policy are limited, the European Commission recently appointed its first Housing Commissioner to coordinate national efforts. The new committee is expected to complement these efforts by exploring potential market reforms and mapping housing needs across the EU.

Policymakers’ reactions

The establishment of the new committees has garnered strong support from the European Parliament’s main political groups. The centre-right European People’s Party (EPP) welcomed the move, with EPP SANT Chair Adam Jarubas describing it as a vital step toward enhancing autonomy in medical procurement, improving crisis preparedness, and advancing the EU’s Health Union. MEP Nicolás Pascual de la Parte, the EPP Group’s Spokesman in SEDE, highlighted the committee’s expanded oversight role concerning the Commissioner for Defence and Space. Additionally, the EPP called for more decisive measures to protect the EU from foreign interference and to address the ongoing housing crisis.

The centre-left Socialists and Democrats (S&D) group also applauded the creation of the Housing Committee. S&D President Iratxe García emphasized her group’s commitment to advocating for the right to decent, affordable housing. She further endorsed the upgrade of SEDE’s mandate, acknowledging its importance in the current geopolitical climate.

Meanwhile, the centrist Renew Europe group celebrated the leadership roles it secured in the European Democracy Shield and SEDE committees. MEP Marie-Agnes Strack-Zimmermann, the new SEDE Chair, underscored the need for Europe to take responsibility for its own defence, stating that the committee would strive to build “a European Union of Defence.” MEP Nathalie Loiseau, the candidate for Chair of the special European Democracy Shield Committee, welcomed the agreement and stressed the importance of coordination against hostile actors.

What’s next

Now that the full committee line-ups have been announced, the new committees will hold their constitutive meetings this week, during which they will elect their Chairs and Vice-Chairs. Their work will commence from February 2025.

Image © European Union 2025 – Source : EP

Poland’s EU Presidency: “Security, Europe!”

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On 1 January 2025, Poland kicked off its 6-month rotating Presidency of the Council of the EU. This puts Poland in a powerful position to set the agenda in the EU, but its Presidency comes at a difficult time for Europe, marked with many internal and external challenges. Aware of these circumstances, the government in Warsaw has very deliberately chosen a simple but strong motto “Security, Europe!” and a logo which represents the country being at the centre of the European Union.

Find out more about the Presidency Priorities and key players in our handy guide (click below), prepared by the Grayling Poland team.

 

Will Labour’s housebuilding targets cut house prices or just keep pace with population growth?

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Town with church

Ahead of this year’s general election, the Prime Minister committed to turning “the dream of owning a home into a reality,” which is undoubtedly a noble aim given the social and financial stability homeownership provides.  

Labour’s analysis ahead of the election focussed on decades of under supply that have failed to keep pace with demand, most acutely in London, the South East and increasingly other major metropolitan areas.  

Rewarding failure 

Our current byzantine system of local government encourages local politicians to delay Local Plans and reject planning applications, as local elections turnouts are low are regularly favour anti-development sentiments.  

Having spent several years as a councillor and Cabinet Member for Housing trying – ultimately successfully – to adopt an ambitious Local Plan, I can attest to how incredibly frustrating and cumbersome the system can feel. 

Human costs of housebuilding failures 

Daily emails from families struggling to pay rent and local people being forced out of their home area would be enough to turn most – but by no means all – NIMBY-minded councillors into champions of housebuilding.  

Rough sleeping, sofa-surfing, unsustainable living situations, cost-of-living crunches and older children still living with parents, the social ripples and implications of housebuilding failures are profound and distressing.  

Having grown up in my local town and seeing communities broken up by excessive house prices was a slow-motion tragedy; increasing supply is crucial. 

Labour backs state power 

Despite my distrust of the current government’s appetite for bigger government and higher taxes, I welcome Labour’s announcement to take a sledgehammer to a sclerotic planning system and local political system that has played an ignoble role in suffocating supply of new homes, in particular: 

  • introduction of mandatory housing targets to deliver 370,000 homes per year 
  • focussing higher targets in areas with greatest unaffordability and potential for growth 
  • mandatory review of green belt boundaries and introduction of ‘grey belt’  
Free-market alternative 

I do not believe that our political system would elect a government that would support a profound liberalisation of the planning system, whereby if you own land you can build on it without a consenting system, albeit within clear safety guidelines and rules. 

As with all market systems, supply would more closely track demand – however, the consequences of this with an ever-increasing population would result in outcomes the British public would almost certainly be horrified about.  

Real term price cuts or just keeping up 

Which takes me on to one of the central unanswered questions around these reforms, which is what long-term effects these reforms are intended to have on the affordability of homes in high demand areas.  

There has been limited coverage of whether the government’s new targets would result house prices rising slower than wages (i.e., real-term reductions) or will simply keep track with an ever-growing population (i.e., house price grows remains constant).     

If it is to be the former, the economic and social benefits are clear – cheaper, better-quality housing, affording the opportunity of home ownership in the country’s most desirable areas.  

If it is to be the latter, then the short-term economic stimulus through building, and reduced housing costs could potentially be wiped out as the increased supply is met with an ever-growing demand – bringing us back to square one.  

Immigration and Reform UK 

This question is inextricably linked to ongoing debates around the record levels of net immigration. Labour needs to be able to demonstrate that the homes they are building will make it easier for people to buy or rent homes in the areas they want to live and work.  

If the housebuilding is seen to simply be keeping pace with a growing population, then the discussion will keep coming back to net immigration being the cause of stubbornly high house prices.  

The Government will also face broader political questions on its decision to arguably relieve London with lower-than-expected uplifts in its targets and moving those to local authorities on the capital’s periphery and in more rural area, which now expect to absorb a greater proportion of the new homes.  

You can well imagine Reform UK – currently rising in the polls – making the argument that huge demand for homes from high net immigration is making housing unaffordable and putting pressure on non-metropolitan areas.  

The best counteraction to this argument is lower real terms house prices, increases in homeownership, lower interest rates and more affordable rent – naturally, none of this is easy but will be necessary to avoid immigration continuing to be a potent political argument against the housebuilding revolution Labour is endeavouring to lead.  

Grayling Planning & Infrastructure 

Grayling Planning & Infrastructure team provides communication and stakeholder engagement services that support the UK’s energy transition, major economic development projects and infrastructure delivery.  

Our multi-award-winning consultants, based in our nine offices across the UK, engage with communities on major TCPA and NSIP projects. We have experience supporting major garden villages and other housebuilding, as well as extensive public affairs expertise in the development space.  

If you have projects requiring communications and engagement support, please do get in touch planning&infrastructure@grayling.com.  

Your New European Commission 2024-2029

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By José Arroyo, Cameron Kelly, Samuel Michel & Marc Planas | Brussels, European Union

The new European Commission officially kicked off on 1 December, marking the beginning of a new chapter for European policymaking. It’s now time for Ursula von der Leyen to put her College of Commissioners to the test as they set out to implement an ambitious agenda for European competitiveness against a backdrop of geopolitical risks and fractured national political landscapes.

Discover the College of Commissioners and their top priorities for the next five year mandate with our handy guide below.

Image © European Union, 2024, CC BY 4.0 

How Social Media Has Transformed Politics

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Digital Download

In 2024 more people are online than ever before, with 64% of the global population active on social media. It’s therefore no surprise that social media has become the most successful channel for marketers in the UK. As digital users such as Gen Z become more influential spenders, and Millennials continue to hold the highest amount of disposable income, we naturally see corporate and consumer business prioritising social media in a bid to capture the attention of this powerful digital-first demographic.

Digital prioritisation has played out across an array of industries but, most notably, in the political sphere. This shift has led to the rapid evolution of various social media platforms, from X to TikTok, as spaces for political discourse. This evolution presents a plethora of new questions and challenges for businesses interacting in this space.

Political Impact on misinformation

A social-first election

Political parties have spent more money than ever before creating snappy, social-first content, with the aim of engaging younger voters. A prime example is Kamala Harris, who spent $113 million on Meta advertising alone during her 15 week campaign, and $4.5 million on talent to fuel her iconic TikTok account.

Challenges

As a result of TikTok’s growing political slant, audiences are increasingly exposed to misleading political content, including falsified AI-generated clips. Examples from the UK include fake videos of ex conservative leader Rishi Sunak making claims about how he is spending public money. Similar deceptive content went viral on the platform during the US election campaign, with phots falsely depicting Taylor Swift endorsing Donald Trump. It’s becoming more difficult than ever for users to distinguish reality from AI.

Beyond TikTok, X is another platform at the heart of the political storm. X has historically been the target of public scrutiny thanks to reductions in security measures, leading to the spread of misinformation in right-wing politics. This misinformation is aggravated by owner, Elon Musk, sharing politically fuelled posts claiming “civil war is inevitable”. X’s lack of moderation and safety measures has led many high-profile users to quit the platform altogether.

Looking Ahead

Users are active on more platforms than ever and, thanks to the rise of interest-based algorithms, they’re discovering new content every day. Wherever users go, misinformation is bound to follow, so, to influence meaningful change across the social media landscape, businesses need to understand the risk of misinformation and have measures in place to protect their brand and consumers from deepfake culture.

Politics and Algorithms

The Echo Chamber effect

We all know that social media algorithms are hyper-personalised. On TikTok we are fed new content based on what we interact with, helping TikTok fuel higher platform engagements and dwell time. However, this year, there’s been reports of X feeds being created by the platform owners with the sole purpose of pushing a political agenda. As part of this, Musk is accused of swaying votes for multiple elections across the globe, including the UKs general election – giving us an insight into the power of algorithms and the dangers of being trapped in an constant echo chamber.

On a positive note, TikTok algorithms have effectively helped to unlock echo chambers by bringing important issues to the surface. TikTok helped thousands of people, internationally, see the parliamentary debate over the revision of the Treaty of Waitangi in New Zealand halted by politicians performing a traditional haka. The video went viral, raising questions as to where indigenous communities fall into social-first politics. Breaking down echo chambers helps social media users expand their perspectives and feel connected to new communities.

Challenges

To avoid X’s echo chamber, many users have opted to switch to alternative platforms. X has experienced a clear decline, most evident in the UK, with a drop in users from 8m to 5.6m, and in the US, with users falling by a fifth. X users are looking at competitor platforms like Meta Threads and BlueSky, to broaden the variety of content they are exposed to, or alternatively to Rumble.

Though many users have headed to alternative platforms, it still raises the question – is the echo chamber effect present on alternative platforms too, and is the algorithm at risk of blurring the lines between personal views and popular content?

Looking Ahead

Platforms need to allow a range of diverse perspectives in users’ feeds so that audiences can make informed decisions when it comes to politics – and other fields. When the algorithms prioritise less prevalent voices, it increases the chances of users uncovering untouched communities. Brands and spokespeople can help tackle the issues of echo chambers by having a presence across multiple social platforms, thereby helping to diversify multiple platform feeds, and giving more users a chance to experience new content.

Politics and Partnerships

The Rise of Political Influencers

The impact of content creators and influencers on politics has reached unprecedented heights, especially within the digital sphere. Numerous elections have taken place this year and many are the first to occur since TikTok has been established. In fact, a study found that 26% of UK social media creators and 39% of US creators have been approached by political organisations to create content for elections.

The recent US election showcases just how integral influencers have become in the political agenda. Most notable examples of political collabs were seen during the US elections. On the left we saw Kamala Harris on “Call her Daddy” – a mainstream, consumer-based podcast. On the right, Donald Trump formed a partnership with Jake Paul, a YouTuber, with a huge young male fanbase. We also see the impact at a European level with  Jordan Bardella, President of the National Front, showcasing just how useful his TikTok following of 1.7m was in the recent French elections.

Challenges:

When it comes to politics, trust is vital, , with 58% of people stating they ‘almost never trust politicians’ in Britain. Politicians have therefore leveraged influencers on digital platforms to retain and foster connections with audiences who are stereotypically hard to reach – from Gen Z users to niche sub-audiences who steer away from traditional media. In fact, more than two in five UK voters (43%) welcome creators posting political content – whether paid or organic – and this preference rises

Influencers are increasingly seen as more trustworthy than traditional politicians, particularly among younger audiences, due to their perceived authenticity – but, how much can a user actually trust them?

Looking ahead:

We need to be cautious of how influencer politics engages young voters. There are already concerns about the oversimplification of complex issues and the potential for misinformation so, with the increasing authority of influencers, brands and government authorities can help by sourcing influencers mindfully and with voters’ welfare in mind.

New European Commission approved: Von der Leyen II aims to boost EU competitiveness

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By José Arroyo, Senior Consultant | Brussels, European Union

On 27 November 2024, the European Parliament approved Ursula von der Leyen’s new 27-member European Commission, set to take office on 1 December for a five-year term. This marks a significant win for von der Leyen and her centre-right European People’s Party (EPP), as Parliament approved all proposed Commissioners – a first since 1999 – despite a contentious confirmation process.

In her speech prior to the vote, von der Leyen reaffirmed the new Commission’s focus on improving the competitiveness of Europe’s economy, with a “Competitiveness Compass” based on former ECB President Mario Draghi’s report. She said this plan will aim to close the innovation gap with the US and China, include a joint plan for decarbonisation and competitiveness, and increase Europe’s security and reduce its dependence on third countries.

Von der Leyen’s programme is ambitious and represents a shift from last mandate’s focus on the EU Green Deal, but she may face challenges in implementing it. In addition to weak governments in France and Germany and geopolitical risks such as Trump’s re-election, the Commission will have to navigate a divided Parliament in which both centrist and right-wing alliances are possible. This risks the executive being caught in the crossfire, satisfying neither and being attacked by both. The fact that von der Leyen’s “college” of Commissioners was approved by a historically thin margin is a cautionary tale.

Von der Leyen 2.0 – a shift to the right

Parliament voted with 370 votes in favour, 282 against and 36 abstentions, to approve the new Commission – a drop from von der Leyen’s 401 votes in her July re-election. The reduced support reflects a change in alliances with a clear turn to the right for the EU. Some Greens and Socialists opposed to the inclusion of far-right Commissioners like Hungary’s Olivér Várhelyi and Italy’s Raffaele Fitto voted against this new Commission even after supporting von der Leyen in July. At the same time, the far-right European Conservatives and Reformists (ECR), who didn’t endorse her back then, provided crucial backing, seeking greater influence through Fitto’s appointment as Executive Vice-President of this new European Commission.

This shift highlights the growing presence of right-wing groups in Parliament. While the EPP traditionally works with the Socialists (S&D) and Liberals (Renew), since the election it has increasingly turned to alliances with ECR and other conservative factions, such as the far-right Patriots for Europe, on key votes. This trend could continue and pose the risk of the Commission being caught in the crossfire between two competing blocks and failing to satisfy either. The fact that the executive was approved with the smallest share of yeses and the highest share of noes since Parliament first got a vote in 1995 is telling.

The mentioned rightwards turn is also reflected in the Commission itself. By party affiliation, the outgoing Commission had at the beginning of its mandate in 2019 10 EPP Commissioners, 9 from the S&D, 6 from Renew, 1 from the Greens and 1 from ECR. The incoming one will have 14 EPP Commissioners, 4 from S&D, 5 from Renew, from 1 ECR, 1 from the Patriots, and 2 independents.

Contentious confirmation process

The approval process for the new Commission required each Commissioner-designate to present their plans to European Parliament committees. While the hearings initially proceeded smoothly, tensions emerged on 12 November, the final day, as the six Vice-Presidents faced Parliament.

The EPP, the largest group in Parliament, withheld support for Spanish socialist Teresa Ribera’s nomination as Executive Vice-President for a Clean, Just, and Competitive Transition. They demanded she first appear before the Spanish Parliament to address her handling of recent catastrophic floods in Valencia, as she had still been Spain’s Minister for the Ecological Transition. Simultaneously, the centre-left S&D and liberal Renew groups expressed reservations about Hungarian Health and Animal Welfare Commissioner-designate Olivér Várhelyi, citing his ties to Viktor Orbán and vague responses during his hearing. The S&D also opposed Italian nominee Raffaele Fitto’s appointment as Executive Vice-President for Cohesion and Reforms due to his affiliation with Italian PM Giorgia Meloni’s far-right ECR.

After a week of intense bargaining with seven confirmations hanging in the balance, a deal was struck on 20 November between the EPP, S&D, and Renew to approve the remaining candidates. A Platform Cooperation Statement was signed, reaffirming support for von der Leyen’s Political Guidelines and committing to cooperation throughout the Parliament’s term. Compromises included stripping Várhelyi of certain health-related responsibilities and reassigning them to Belgian Commissioner Hadja Lahbib. In turn, Fitto remains Executive Vice-President and the EPP accepted Ribera with no changes to her broad portfolio.

Ultimately, the EPP emerged as the big winner of the process. It secured the approval of von der Leyen’s Commission with minimal concessions, preserving Fitto’s elevated role while gaining flexibility to form ad-hoc alliances with right-wing groups such as the ECR and Patriots for Europe. This freedom allows the EPP to bypass Renew and S&D on key votes, as it has already demonstrated since the election. This outcome provoked criticism from the Greens and some Socialists, who stated they would not be bound by the agreement signed by their Spanish leader Iratxe García.

Promises to reignite Europe’s competitiveness

Before the vote, von der Leyen outlined her team’s focus on boosting EU competitiveness over the next five years, guided by a new “Competitiveness Compass” inspired by Mario Draghi’s report warning of Europe’s economic lag behind the US and China.

Key priorities include closing the innovation gap through increasing investment in research and development, removing barriers for startups, and leading in frontier technologies with a unified tax framework. She pledged a Clean Industrial Deal within 100 days to lower energy costs and support the automotive sector’s green transition.

Von der Leyen also stressed diversifying supply chains for critical raw materials, reducing dependence on China and Russia, and expanding trade partnerships. To address the EU’s investment gap, she proposed simplifying funding mechanisms, launching a Saving and Investments Union, cutting regulatory burdens, and upskilling Europe’s workforce to enhance competitiveness.

Ambitious programme but major challenges await

Von der Leyen’s programme is clearly ambitious and represents a shift from last mandate’s focus on the EU Green Deal. While the Commission is not abandoning its decarbonisation objectives, its attention is clearly moving towards reigniting the bloc’s economic competitiveness.

However, weak governments in the EU’s biggest countries Germany and France, a likely snap German election in February, and geopolitical risks – such as Donald Trump’s return to the US presidency – could derail von der Leyen’s agenda. Furthermore, navigating a Parliament divided between centrist and right-wing alliances will require careful negotiation to prevent a stalemate.

Despite these challenges, securing the Commission’s approval without any rejections marks a significant victory for von der Leyen and the EPP, solidifying their leadership and influence for the next five years.

 

Image © European Union 2024 – Source : EP

What can we expect from Scotland’s budget?

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Someone holding Scottish money

With the UK Budget now out of the way, all eyes will turn to the Scottish Budget, which is scheduled to be delivered on 4th December. So, what can we expect from the Scottish Budget, how do changes to the political backdrop impact the parliamentary process for approval of the budget and what impact will the Chancellor’s announcement have?

Financial gains

First, the good news. Thanks to the uplift in the UK Budget, Scotland stands to gain (according to HM Treasury) an additional £3.4bn through the Barnett Formula – £610 million of which is earmarked for capital investment. However, although the Budget was broadly welcomed by the Scottish Government as ‘a step in the right direction,’ there are question marks over the impact of National Insurance contributions on the Scottish Budget to the tune of £500 million.

On the face of it, the UK Budget announcement will certainly give some relief to the Scottish Government and build in some short-term budgetary stability. However, the champagne corks will hardly have been flying as the impact of inflation, NI contributions and previous cutbacks will eat into the additional funding.

Additional capital spending will be particularly welcomed. The Scottish Government had all but put a halt on any new capital projects. This should at least enable some of those plans that were on the drawing board to move forward. But the backlog of need has steadily grown and it is likely that the funds available could easily be used many times over and delivery will remain slow.

Straitjacket

The Scottish Government is caught in an increasingly tight financial straitjacket due to rising labour costs and a relatively stagnant economy. From train drivers to refuse collection and college lecturers, there has been a steady stream of demands for higher wages. Some of these are ongoing and others are likely to arise in due course, though probably not to the same level as seen in recent years. The Scottish economic output in recent months has remained low, which will affect the appetite for taxes.

A cautious approach

The Scottish Government is therefore unlikely to be in a position to offer much more than a standstill budget in many areas.  That has serious political implications because as a minority administration, the SNP needs the support of at least one other political party to get its budget approved. There has been much debate about which party may be able or willing to do a deal and talk of red lines. What is likely is that one or more party will support the budget in return for significant investment in key policy areas, such as social care or climate action. A deal with the Scottish Lib Dems is often talked about as the most likely outcome, but it’s not a given and the Party will be keen to come away with a significant win.

The outcome of the Scottish Budget is therefore expected to be largely a cautious one. Modest spending plans in capital spending and in some priority revenue spending areas – such as education and healthcare. But there may be scope for some small surprises depending on what, if any, budget deal is done with a smaller party. Regardless, the SNP will be keen to rebuild the public’s trust as a competent manager of the Scottish Exchequer.

 

How will the US election influence the CEE region?

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How will the US election influence the CEE region?

The outcome of the upcoming U.S. presidential election will resonate far beyond American borders. No matter who becomes the next president of the United States, the election outcome will have profound and complex effects on the political, economic, and cultural dynamics of Central and Eastern Europe. To explore these potential impacts, Grayling’s local public affairs teams across 10 countries in the CEE region have prepared a comprehensive overview. The report’s context was set by an editorial from our Washington team at Dutko Government Relations.

Security challenges

The stakes of the U.S. elections are naturally highest for Ukraine, given the ongoing Russia-Ukraine war. If Kamala Harris wins and the Democratic majority in Congress is preserved, no significant changes in policy are expected. However, if Harris wins but both houses of Congress are controlled by Republicans, delays in assistance to Ukraine might occur. The degree of delay would be directly proportional to the number of Trump supporters in Congress. Predicting Trump’s actions is challenging. The most likely scenario involves initial attempts to initiate negotiations between Ukraine and Russia, using leverage to reduce military and financial support to Ukraine. Depending on Ukraine’s resilience and the initiative of European allies, if Ukraine refuses negotiations and the EU compensates for part of the American support, Trump may reconsider his stance. A potential reduction in U.S. support might lead to a recalibration of Ukraine’s foreign policy, seeking stronger ties with European allies and other global partners.

 

 

US Military Presence (Military Personnel per Million Local Residents)

Source: Statista/US Department of Defense: Number of active duty military personnel in Europe, World Bank: Population data (gender statistics)

However, not only Ukraine, but the entire CEE region depends on the U.S., though to varying degrees. This dependency is captured by the Formal Bilateral Influence Capacity Index, a comprehensive metric developed by the Atlantic Council. This index and other indicators reveal that many countries in the region rely on the U.S. as both an economic partner and a security provider, indirectly through Germany. While there are about 600 active U.S. military personnel in the CEE region, Germany hosts the largest number of American troops—35,068 personnel. Although Pentagon officials may resist troop withdrawals, a potential Trump presidency could lead to reductions. Many countries in the region prepared for a Trump presidency by increasing their defence spendings and purchasing U.S. arms and military equipment.

US Influence Capacity (FBIC INDEX, 2020)

Source: Atlantic Council, Formal Bilateral Influence Capacity Index

Another concern is that some CEE countries, particularly Hungary, are deepening their ties with China. This could lead to challenges for either a Harris or Trump administration. Tensions with the U.S. are likely to escalate if “China hawks” gain influence within the State Department, regardless of who becomes president.

US impact on the economy

The region’s reliance on the U.S. is also reinforced through the German economy, a major U.S. trading partner, with nearly 10% of Germany’s exports going to the U.S. If Trump’s proposed protective tariffs on all foreign goods were implemented, Slovakia would be impacted most directly, as 4.5% of its exports were destined for the U.S. in 2023. Poland (3.1%) and Hungary (2.9%) also have notable levels of direct export dependency on the U.S. However, it’s important to note that a broad trade conflict would more likely affect the region indirectly, through its wider impact on the global economy. While Harris is also expected to pursue protectionist policies, her approach would likely be narrower, focusing on supporting U.S. manufacturing and reducing dependence on China.

Share of US in the export of goods

Source: Eurostat: Trade with the United States by EU Member States; Eurostat: International trade, by reporting country, total product; National Bank of Ukraine: External Trade; Statistical Office of the Republic of Serbia: External Trade of Goods, EUR, 2023

Although trade balance is a lesser concern for mainstream economists, it carries significant political weight. During his first term, Donald Trump placed a strong emphasis on reducing the U.S. trade deficit and preventing other countries from “ripping off America”—suggesting that a large trade surplus could be a potential disadvantage if Trump were to win. In this regard, Germany is in the most precarious position, with a trade surplus of €85.8 billion with the United States. Most CEE countries also run trade surpluses with the U.S., with Slovakia having the largest surplus in 2023 at €4.22 billion. In contrast, Ukraine (€2.51 billion), Croatia (€480 million), and Serbia (€29 million) all have trade deficits with the US.

 

 

Trade balance of goods with the United States, 2023 (billion EUR)

Source: Eurostat: Trade with the United States by EU Member States; Eurostat: International trade, by reporting country, total product; National Bank of Ukraine: External Trade; Statistical Office of the Republic of Serbia: External Trade of Goods, EUR, 2023

U.S.-CEE economic cooperations are expected to continue, especially in the energy sector. Croatia is working on expanding LNG capacity near the island of Krk, supported by the U.S. Although the project has been recently halted, Grayling expects that U.S. support for LNG will continue no matter the election outcome. One of the cornerstone initiatives of U.S.-Bulgarian cooperation is the collaboration in nuclear energy, which includes the construction of the seventh and eighth units of the Kozloduy Nuclear Power Plant (NPP). In Romania, an important U.S. project is the deployment of SMR nuclear reactors (expected to be completed by 2029). The project to build Poland’s first nuclear power plant, initiated by President Trump, has also gained support from Vice President Harris. Now, Poland is planning to construct its second nuclear power plant, with potential involvement from U.S. suppliers.

Conclusion

A Trump victory could weaken the region’s security through a more transactional approach to NATO and Russia. Economically, protectionist U.S. policies and potential shifts in energy and trade partnerships could create instability. Culturally, Trump’s support for nationalist, anti-migration, and anti-liberal rhetoric may further embolden right-wing movements. Ultimately, CEE countries might need to navigate a more uncertain transatlantic relationship under another Trump administration.

A Kamala Harris victory in the 2024 election would likely reinforce the U.S.’s role as a committed partner to the CEE region, particularly in matters of security, trade, and democratic governance. Politically, it would reassure CEE nations of continued U.S. support against Russian aggression and strengthen NATO’s presence. Economically, it would promote closer transatlantic ties, encourage investment in green energy, and sustain sanctions against Russia. However, Harris’s progressive stance on issues such as migration, LGBTQ+ rights, and democracy could lead to tensions with some conservative governments in CEE.

 

Download the report now for an in-depth look at how CEE-USA relationships shape the geopolitical landscape of the region.

Grayling Poll of Experts | How accurate was our election prediction?

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On June 9, 2024, Hungary held two significant elections: voters simultaneously elected members of the European Parliament and municipal representatives. The campaign season was marked by political turmoil. A paedophilia scandal in February not only led to the resignation of President Novák but also severely eroded public support for Fidesz. Péter Magyar, a former Fidesz insider and ex-husband of former Justice Minister Varga (who also resigned due to the scandal), seized the opportunity to launch a public attack against Fidesz and founded his new TISZA party.

In May, Grayling Hungary prepared an election forecast to help our clients navigate this turbulent period. Our analysis was informed by insights from the country’s leading political analysts, pollsters, and social scientists. We distributed our questionnaire to experts from across the political spectrum, ensuring diverse perspectives. The survey asked them to estimate how many seats each Hungarian political party would secure in the European Parliament, predict the outcome of the mayoral race in Budapest, and identify cities where results were expected to be particularly close. Additionally, we invited experts to elaborate on their expectations, including the potential impact of the newly established TISZA party.

Why did we prepare our forecast?

In spring 2024, there was a high level of uncertainty due to the rapid pace of political developments and the fragmentation of the opposition landscape. Another source of uncertainty was the questionable predictive power of publicly available election polls in Hungary. Before the last parliamentary elections, both government-affiliated and independent pollsters overestimated support for the joint opposition by 4 to 11 percentage points and underestimated Fidesz support by 2 to 5 percentage points, according to Gábor Tóka’s estimations published in the Social Report 2022. However, it is important to note that polling averages were relatively accurate in predicting the results of the 2019 European elections, the 2018 general elections, and, as later confirmed, the 2024 European Parliament elections. Given these dynamics, we believed it would be valuable to survey experts on their expectations, as they can draw on data and insights unavailable to the public. Furthermore, our survey allowed room for experts to speculate on potential shifts in public sentiment. Most importantly, respondents were able to provide explanations for their predictions.

The proof of the pudding

In our forecast, we highlighted both the overall range of expert expectations for the distribution of MEP seats and the median predictions for each party. The expert narratives, as well as Grayling’s local insights, emphasized the significance of Péter Magyar and suggested that the TISZA party could fundamentally reshape the Hungarian party system. However, the experts slightly underestimated the magnitude of the political shift caused by TISZA’s emergence. While the median expectation was 10 seats for Fidesz and 6 seats for TISZA, both parties exceeded these predictions by winning an additional MEP seat each. In contrast, the DK-MSZP-Dialogue alliance secured only 2 MEP seats, falling short of the 3 seats expected by the experts. Consistent with the forecast, the far-right Our Homeland party gained one MEP seat, while Momentum, Jobbik, and the Green LMP all failed to return to the European Parliament. Many experts also predicted that the satirical Dog Party would win its first EP seat, but it fell short with only 2.6% of the vote.

Grayling Poll of Experts forecast and the results of the European elections

*DK, MSZP and Dialogue run together, but only DK gained MEP seats as a result of the alliance’s poor electoral performance.

We also compared the median forecast of experts surveyed by Grayling to the expected distribution of Hungarian MEP seats based on the final publicly available polls from various Hungarian research institutes. Like our median forecast, most polls underestimated the number of EP seats TISZA would secure. On average, predictions based on public opinion research were closer to Fidesz’s actual results than our experts’ median forecast.

Grayling’s May forecast proved to be as accurate as predictions from Medián Institute’s early June poll, as well as Századvég, Társadalomkutató’s May polls, and Iránytű’s April poll, with all forecasts deviating from the actual results by 4 seats. The least accurate poll was Republikon’s from late April, while 21 Research Center’s innovative “last minute” poll perfectly predicted the MEP seat distribution. Other polls released in late May or early June were also slightly more accurate than the median forecast of our expert survey.

Predicted distribution of Hungarian MEP seats

*Hungarian pollsters’ publicly available researches before the European election.

Projection is based on share of respondents who planned to vote in a given poll. Date is the middle of data collection.

Source: Vox Populi / Gábor Tóka, 21 Research Center

Drama in Budapest, fog in the countryside

We also evaluated the surveyed experts’ expectations regarding the municipal elections. Gergely Karácsony, the government-critical mayor of Budapest, was re-elected by a narrow margin of only 293 votes, following three recounts. Out of 14 responses, 11 experts accurately predicted this outcome, while 3 opted for his third-party challenger, Dávid Vitézy. Notably, two analysts who expected Vitézy to win correctly predicted that the governing Fidesz’s candidate, Alexandra Szentkirályi would withdraw from the race.

In the countryside, the majority of experts anticipated tight races in rural cities such as Győr, Eger, Szolnok, and Nyíregyháza. However, the races in Miskolc, Tatabánya, and Hódmezővásárhely turned out to be less competitive than many had expected. There are several, not necessarily mutually exclusive reasons why there was a high level of uncertainty regarding the municipal elections. First, the attention of political media is overly focused on Budapest, and local media significantly weakened in Hungary. Second, there is a lack of publicly available, reliable, local quality polls. Third, in many cases, the race was hard to oversee, as new political fronts opened in some rural towns (and also Budapest districts), where both the opposition and the government side was divided.