Proportionality is achieved by the additional members form EU-wide votes.

ceiling(sqrt(EU.population)/200)
    Germany	 France 	 UK	  Italy       Spain	 Poland 
	 46	     41 	 40	     39 	 34	     31 
    Romania Netherlands      Greece	Belgium    Portugal	Czechia 
	 24	     21 	 17	     17 	 17	     17 
    Hungary	 Sweden     Austria    Bulgaria     Denmark    Slovakia 
	 16	     16 	 15	     14 	 12	     12 
    Finland	Ireland   Lithuania	 Latvia    Slovenia	Estonia 
	 12	     11 	 10	      8 	  8	      6 
     Cyprus  Luxembourg       Malta 
	  5	      4 	  4 

for a total of 497 seats. Add to this another 200 or 250 elected on a single EU-wide list and you get a parliament of 697-747 which is comparable to the current 736. Iceland would have 3 seats under this scheme, bringing the total to 500 + 200 or 500 + 250.

The peak-to-trough part of the business cycle is an outlier. Carnot would have died laughing.