STRASBOURG —Europe’s main political parties have agreed to roll back green rules for businesses after a whirlwind day of political negotiations that nearly collapsed the centrist ruling consensus.

The European People’s Party (EPP) forced the hand of the Socialists & Democrats (S&D) and the liberals of Renew by threatening to abandon the traditional centrist majority and ally with the far right to push through tougher measures if their demands weren’t met.

“It is very clear for all the political groups that the majorities have changed in the Parliament, and all the political groups have to adapt to the new reality,” Jörgen Warborn, lead EPP negotiator on the file, told POLITICO, repeating that if the Socialists and liberals don’t play ball, “then there is also another majority to build with.”

The EPP’s success in getting what they want on paring back green rules shows it has the power to pressure its partners into coughing up major concessions — setting the tone for negotiations on controversial upcoming decisions on the deportations regulation and the 2040 climate neutrality target.

Sidestepping right

The agreement paves the way for lawmakers to pare back sustainability reporting and supply chain due-diligence obligations for businesses as part of the first omnibus simplification bill.

The concession by the center-left Socialists, which had previously dug their heels in over the legislation, keeps the European Parliament’s centrist majority alive — but it may not contain the emerging rightward rupture that is reshaping European policymaking.

“The S&D´ has taken this decision with responsibility and unity. This compromise is not our preferred option but the alternative was a worse EPP agreement with the far right,” said Andrea Meceiras, a spokesperson for García.

Just hours before the S&D capitulation, the EPP had indicated they would push ahead with a version of the compromise that was backed by the right-wing European Conservatives & Reformists (ECR) and the far-right Patriots for Europe (PfE) and Europe of Sovereign Nations (ESN) groups.

The committee in charge of the file sent an email on Wednesday on behalf of the EPP’s Warborn to other groups, with only the version of the text backed by right-wing and far-right groups as a possibility.

Later on Wednesday, EPP group leader Manfred Weber met with his socialist counterpart Iratxe García and Renew head Valérie Hayer to try to resolve the dispute. That meeting ended with no agreement, three Parliament officials familiar with the talks told POLITICO.

The risk of being frozen out by a rightward lurch ultimately convinced the Socialists to accept an alternative position on the simplification bill that they had previously rejected.

“I’m really happy that it put pressure on S&D, Renew and the Greens, and that they came back and accepted my proposal,” Warborn told POLITICO.

The S&D, meanwhile, were left seething. “While negotiations at leaders level were happening, the EPP was presenting  compromises with the far right. This is unacceptable and shows the contradictions between EPP at the [European Parliament] and [the] Berlaymont,” said Maceiras, a spokesperson for García.

The outcome prompted MEP Lara Wolters, who had led the negotiations on behalf of S&D until now, to quit. “Under the current circumstances my position as shadow rapporteur on the Omnibus I has become untenable,” she said.

Pascal Canfin, lead negotiator for Renew Europe, welcomed the agreement on the first omnibus proposal. “We always aimed for a VDL coalition on the file,” he said, referring to European Commission President Ursula von der Leyen, who herself hails from the EPP.

Von der Leyen is set to face two more votes of no confidence in the Parliament on Thursday.

The omnibus bill aims to reduce reporting obligations for companies under the bloc’s sustainability disclosure and supply chain transparency rules. It’s the first of a series of proposals aimed at cutting regulations for businesses, which been von der Leyen’s key policy target in her second term as Commission president.

It’s also one of the first concrete legislative proposals in von der Leyen’s second term as head of the EU executive, and is a major test of whether the majority that re-elected her still holds and could pass other bills together in future.

Max Griera was reporting from Strasbourg, Marianne Gros was reporting from Brussels.