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Totally dominant lobbies in a downgraded Europe – (part 3)

Barroso administration: Golden medal in serving interests

A research by the Corporate Europe Observatory (CEO)

Through the course of the crisis, attempts by corporations and corporate lobby groups to influence EU policies have probably been more successful than ever, in part due to a close relationship with the Commission.”

Corporate Europe Observatory has gathered a lot of evidence over time and covering many different areas that shows how the Commission is easily captured by corporate interests. This report is an attempt to produce a condensed version of how the Commission has come to act on behalf of corporations over the past five years, focusing on climate policies, agriculture and food, finance, economic, and fiscal policies.”

3 - Single market trumps stability

Key findings

In November 2009, the ALTER-EU coalition released a report that showed a marked dominance of people with links to financial corporations in all the advisory bodies that had helped guide the Commission on financial regulation in the years preceding the crisis.”

Former Commissioner McCreecy put it like this: 'What we do not need is to become captive of those with the biggest lobby budgets or the most persuasive lobbyists: we need to remember that it was many of those same lobbyists who in the past managed to convince legislators to insert clauses and provisions that contributed so much to the lax standards and mass excesses that have created the systemic risks. The taxpayer is now forced to pick up the bill.'”

In a final count by Corporate Europe Observatory, the advisory groups in place during the time when the European Union was going through the banking reform process, were more or less as dominated by the financial lobby as before. Three fourths of the non-governmental advisors expert groups had links to financial corporations.

When new legislation proposals pass the desks of financial corporations, it is always very likely that this will impact the final proposal. And this close interaction between the Commission (and DG MARKT) and the financial lobby has affected the final result of the reform agenda deeply. Considerations for the profitability of banks, and the drive for a deeper single market on financial services seem to have been at the forefront of the agenda, far more than reforming finance to avoid a repetition of the collapse of the financial bubble.”

At the time, the Commission was under some fire to rebalance the composition of its advisory groups, aka expert groups, and in response the Commission set up a Group of Experts on Banking Issues (GEBI). However, this group too was severely imbalanced to the advantage of financial corporations. Of the 42 members of the advisory group, 34 came from banks and investment firms. After enduring some public criticism, ironically the Commission decided to close the group instead of reforming it, leaving more space for financial corporations to conduct their lobbying effort via bilateral meetings with the civil servants in charge of the dossier. In the end, the Commission tabled a proposal which by most accounts was in line with the demands of the biggest banks.”

Among the topics debated between in-coming Commissioner Michel Barnier and the European Parliament during the hearing of the new Commission in early 2010, was food speculation. [...] In the years that followed, the Commissioner and his civil servants discussed the matter on an endless number of occasions with the financial industry, including via two expert groups – the derivatives expert group and the Expert Group on Market Infrastructures – both dominated by financial corporations, most members of the key lobby group on derivatives, the International Swaps and Derivatives Association. Both expert groups would be closed well before the Commission tabled its proposal – as if to waive criticism for a one-sided preparatory process. However, instead of formally setting up a balanced expert group – with all that would require in terms of transparency, such as listing it in the official register of expert groups with names of the participants – the Commissioner instead decided to organise a series of so-called 'workshops'. These workshops had all the characteristics of expert groups, but were never listed in the register. Their existence became publicly known only when the Commission tabled its proposal.

When preparing its proposal for a directive on 'recovery and resolution' of banks, the Commission ignored flat out all standards and guidelines on use of external expertise and simply collaborated with a special working group of the European Banking Federation, the most important lobby group for banks, to design the proposal, according to its own 'impact assessment'.”


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