The European Union has for some time lived according to two core political principles: the Brussels effect and the cordon sanitaire. The first is the idea that the EU, simply by virtue of its market size, can act as the world’s regulator as long as it always steps in first to do so. The second is the idea that the far-Right can — and must — be blocked from power.

Neither of these ideas have been good for the EU. The Brussels effect encourages the EU to rush in regulating sectors of the economy before it really knows what will happen. The need to be first, so you can set the standards, trumps carefully considered regulation. It also distracts from what should be the EU’s main priority: completing a still-fragmented single market, in all of its aspects. The cordon sanitaire contributes to political fragmentation, and gives the far-Right the political oxygen of opposition.

Both of those ideas received a fatal blow yesterday. The European Parliament voted, with 382 votes in favour and 249 against, to largely gut the EU’s new supply chain law. Instead of applying to companies with more than 1,000 employees and €450 million in turnover, the law’s due diligence provisions will now only affect firms with more than 5,000 employees and €1.5 billion in turnover. This would take 90% of the firms which would previously have had to comply with the law out of scope. The centre-right European People’s Party voted with the far-Right groups in the EP to put this into effect.

But this might not be the last we hear of the supply chain law — or corporate sustainability due diligence directive, as it’s known — either. Both France and Germany want to go further and get rid of the law entirely. This is also what some of the staunchest corporate opponents of the law, such as TotalEnergies and ExxonMobil, want. These companies are obviously still big enough to be within the law’s scope.

If France and Germany do get their way, the shift will be in no small part due to a reverse-Brussels effect. American companies which weren’t happy with the law lobbied the Trump administration, which placed pressure on member states and the EU over it. Qatar, a major liquefied natural gas exporter, last month said it wouldn’t be able to send its LNG to the EU based on the law in its current form. The fact of the matter is that Europe has geopolitical dependencies on these countries, and that trumps regulatory standardisation.

Yesterday’s vote is also unlikely to be the last time the centre-right cooperates with the far-Right. It is increasingly common for the two groups to vote together on laws and go into government in several different European countries. Even Germany, where the Christian Democratic Union has been the firmest holdout, has already accepted something similar to what happened yesterday, when the CDU and Alternative for Germany voted together on a migration bill in January. This won’t necessarily happen all the time right away. Yesterday, the centre-right also voted against the far-Right in the EP to put a 2040 climate target in place. But the direction of travel is clear.

Whether this can stave off the far-Right’s momentum in Europe is another story, however. One of the big political problems with the EU’s regulatory agenda for centrists is that it has given the far-Right an opening on economic policy. Far-Right parties have traditionally found it hard to develop coherent economic agendas because their voter bases are often built around opposition to immigration but split on economic issues. A Marine Le Pen voter in well-to-do Nice might lean Right on tax and spending, but one in deindustrialised Moselle probably goes the opposite way.

Yet the green agenda and anti-digital regulations provide the far-Right with an economic scapegoat. While the regulatory overreach is arguably part of Europe’s economic problem, it is more of a symptom than a cause of the malaise, something the far-Right parties have no answer for either. However, as with immigration, it provides the far-Right’s voter base with an external reason for their problems, allowing these parties to cement their appeal.

This is an edited version of an article which originally appeared in the Eurointelligence newsletter.