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Democracy is nobody’s business

Vicky Cann from Corporate Europe Observatory explains how politicians, corporations and lobbyists have put the cocktail reception at the heart of decision making in Brussels

March 25, 2014
7 min read

The opening preamble of the Lisbon Treaty confirms the ‘inalienable rights of the human person, freedom, democracy, equality and the rule of law’. Fine words, but all too often the European Union’s so-called democracy works for business, not for people.

The corporate lobby in Brussels is large, active, well-funded, well-connected and, as a result, increasingly able to leave its dirty fingerprints all over the legislation that comes out of the EU. And since as much as half of our domestic laws now originate in Brussels, the direct impact on our lives of corporate Europe is considerable.

How many social movements, NGOs or trade unionists get to meet with a head of state such as German chancellor Angela Merkel, let alone two (Merkel and French president François Hollande) as well as the European Commission president José Manuel Barroso at the same time? Yet for the European Round Table of Industrialists (ERT), one of Brussels’ premier corporate lobbies, this is an annual event. The most recent meeting happened in February, when the issues in their sights seem to have been climate and energy policies, and making sure that greenhouse gas emission targets do not get in the way of the industrialists’ aspirations to increase their share of Europe’s GDP.

A good climate for business

Climate change policy-making at the European level has long been dominated by corporate interests. The European Commission recently proposed some dismal 2030 climate targets. Threats from the biggest industrial lobbies to relocate or disinvest heaped pressure on a Commission already lukewarm towards climate action. Instead, the economic recovery has taken centre stage, and rather than invest in a green new deal to move beyond fossil fuels, Brussels is listening to BusinessEurope, Brussels’ most powerful business lobby, which represents big fossil fuel interests and energy-intensive industries.

EU member state leaders such as shale- and nuclear-friendly David Cameron have also lobbied on behalf of the fossil fuel industry, attempting to scupper renewable energy targets. In January, the European Commission published a framework to guide member states on how to regulate shale gas and its extraction via fracking, but it failed to provide mandatory protection against the environmental and health risks.

The UK, Polish and Romanian governments, working alongside their own domestic energy industry and EU-wide lobby groups, managed to fight off legally-binding environmental regulations for the shale gas industry. Among many tactics used, MEPs were treated to cocktails and an exhibition just before they entered the plenary for an important shale gas vote by the benign-sounding ‘Citizens Coalition for Responsible Energy’. This coalition unashamedly promotes shale gas, which isn’t surprising when you know that it is a front-group funded by oil and gas companies, in a lobbying technique known as ‘astro-turfing’. The exhibition and cocktails were co-sponsored by conservative MEPs.

It takes two to lobby

And this is the key point. Successful lobbying requires two parties: one to lobby and the other one to listen and respond. At the European level too many decision-makers – commissioners, officials and MEPs, as well as national leaders operating in the European Council – are too ready to listen and be persuaded of the merits of what big business lobbyists tell them.

Why is this? In some cases the corporate lobbyists’ views chime with the perceived mission of the lobbied. After all, the EU and its predecessor institutions are ideological constructs, aimed at dismantling trade barriers and creating a free market for goods and services. So it should not come as any surprise that EU decision‑makers are happy to entertain corporate lobbyists who share that ultimate goal.

Then there is the capacity gap. The European Commission initiates legislation in a large range of policy areas but with a staff the size of a middling UK government department. Right-wing bluster about the bloated EU bureaucracy is a myth. In fact the Commission has a serious capacity problem and deals with it by relying on external expert advisers, many of whom represent corporate interests, which are more than happy to provide ideas, recommendations, policy analysis and research throughout the legislative process.

Advisory groups are often formed before laws have even been drafted, and it is in this pre-legislative stage that corporations have the most influence at the EU level. Following the economic crash of 2008–9, the Commission pulled together an advisory group, headed the by well‑known banker Jacques De Larosière and full of the same financial institutions that caused the crisis in the first place: Goldman Sachs, Lehman Brothers, BNP Paribas, Citigroup. Unsurprisingly, the group’s recommendations, which then shaped the Commission’s response to the crisis, never questioned banking self-regulation, nor did they suggest breaking up banks that were ‘too big to fail’.

The same process is playing out today. A Commission advisory group to tackle tax-dodging, for example, is full of representatives of the very corporations that dodge tax, as well as the accountants who advise them how.

Meanwhile, the recent proposal for a European banking union has demonstrated the lack of political will to rein in the power of the big banks. The banking union will expand the single market for financial services and make it harder for member states to impose tougher demands on their own banks. The deal does not tackle the irresponsible speculative behaviour of banks, and it will be the public purse that picks up the cost of any resulting bailouts.

Dismantling corporate Europe

Perhaps the biggest issue on the agenda of the corporate lobby right now is the Transatlantic Trade and Investment Partnership (TTIP). The European Commission calls this proposed EU-US agreement the ‘biggest trade deal in the world’ and it is a major policy priority. Europe’s biggest businesses and employers’ organisations are highly enthusiastic about TTIP and the Commission is ready and willing to offer privileged access to business lobbyists and to negotiate on their behalf.

Corporate Europe Observatory recently conducted an analysis of leaked negotiating documents, revealing just how close the EU position is to the demands of big business. Major EU and US business interests have collaborated on a proposal for so-called regulatory cooperation, which, if introduced through TTIP, would likely see the downgrading of current standards and regulations on environmental, social and financial issues, while also giving business a permanent seat at the table to co-write future legislation and regulations. The Commission is running with this idea.

But despite the power of the corporate lobby, the voice of citizens has not been lost. TTIP’s wide scope has created a huge coalition of activists from local communities up to the European and transatlantic level. They are all working together to defeat this behemoth. And the upcoming European elections give us an opportunity to elect MEPs who share our concerns about the rise of corporate Europe.

In the next few weeks, the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) will launch a campaign to demand that future MEPs ‘stand-up for citizens and democracy against the excessive lobbying influence of banks and big business’. We will be working with activists across Europe to demand thousands of candidates pledge to take action, once elected, to fight on behalf of the public interest. If they are voted in, we will hold these politicians to account by making sure they work for democracy, transparency and against the excessive power of corporate lobbying.

MEPs need to push the Commission to implement a mandatory lobby register and proactive transparency rules so we always know who is lobbying whom; to take action to end the dominance of the financial industry and other big business lobbies during all steps of the legislative process, particularly the advisory group stage; to counter efforts by corporate lobbyists to weaken or dismantle important regulations, for example in the context of EU-US trade talks; and to make sure that MEPs put their own house in order by revamping their ethics rules.

There is no quick fix for the corporate capture of our EU policy‑makers, but these measures would at least start us on the long journey towards dismantling corporate Europe and creating a genuine people’s Europe.

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