A shift to the right and significant losses for the Greens – this outcome of the European elections was expected. However, it's one thing to take note of polls and quite another to face an election result. For the business sector, which had campaigned against the election of nationalist parties due to a shortage of skilled workers, a period of uncertainty is now approaching. The European Green Deal is likely to be unraveled and renegotiated. This will happen regardless of whether the next Commission President is once again Ursula von der Leyen. The Liberals have already announced that their support for von der Leyen will also depend on whether she rescinds the end date for combustion engines.

An even greater green reversal threatens if French President Emmanuel Macron´s gamble does not pay off, and there is a change of government in France. The Green Deal was originally based on the expectation a few years back of a permanent strengthening of the Greens in Europe. But the Greens are significantly weaker in the new European Parliament. Their influence is likely to diminish.

The assertion from politicians that the economy does not want a policy shift is too general. While it is true that many large corporations, which are the first to be affected by new regulations, have already adapted to many requirements, the picture is more mixed for Small and Medium Sized Enterprises (SMEs), where resources are scarcer, and the relative capacity for documentation and reporting obligations creates more of a burden.

From an investor's perspective, the image of a reliable and stable Europe has suffered further damage. In a fragmented European political landscape, long-term policy decisions are likely to become increasingly difficult, with majorities often painstakingly sought on a case-by-case basis. Alongside locational disadvantages like a fragmented capital market, an ageing population, relatively high tax burdens, and sluggish bureaucracy, political instability has now also become a concern.

However in many areas, the green reversal will have a limited impact. For the automotive industry, it may not matter whether the combustion engine ban in the EU is lifted. The industry is already aligning its long-term strategy more closely with the US and China – markets that appear more dependable than Europe. And that is perhaps the saddest part of the election result.