Captured states: When EU governments act as middlemen for corporate interests

By Vicky Cann.

Do you know why the banks got their way after the financial crisis, while you shouldered the impacts of austerity? Or why our food will still be exposed to the dangerous pesticide glyphosate in the coming years? Or why the EU’s climate targets are much weaker than originally planned?

Corporate lobbies are actively influencing decision-making to ensure that EU laws and policies suit them, including via national ministers and officials. In fact, member states are the missing part of the jigsaw, alongside the European Commission, elements within the European Parliament, and the EU treaties, which explain the pro-corporate bias of too many EU laws and policies.

Many of the ways in which member states feed into EU decision-making are shrouded in secrecy and not commonly studied, but now a report by Corporate Europe Observatory, Captured states: When EU governments are a channel for corporate interests, breaks new ground by providing an overview of how member states act as EU middlemen for corporate interests. And whether it is on climate change, finance, chemicals, data privacy, austerity, or many other issues, when corporate interests win, the public interest loses out.

The influence of the car industry on the German political establishment, and the negative impact of this on EU climate and emissions’ regulation; the power of the state-owned coal industry which has led the Polish Government to be such a climate pariah; or the iconic status of the City of London, which can count on the UK government to back its demands for the lowest possible financial regulation – these are all examples of how member states and national corporate lobbies have developed a symbiotic relationship. In these examples, the national corporate interest has – wholly wrongly – become synonymous with the national public interest as presented by the relevant government in EU fora.

Privileged access

Meanwhile, elite corporate lobbies have access to EU leaders that NGOs and trade unions simply cannot match. Take, for example, the regular meetings of the European Round Table of Industrialists, which brings together 50 bosses of major European multinational companies such as Telefónica, Siemens, Total, and BMW, with the leaders of France and Germany. Or the cosy cocktails between member states’ trade officials and the European Services forum which represents Vodafone, HSBC, and Deutsche Telekom.

This kind of privileged access, and massive lobby spending power, means that the corporate sector significantly outguns civil society when it comes to influencing complex and opaque EU decision-making processes involving national governments. This is then reflected in the progress and outcomes of a wide range of EU dossiers, from ePrivacy to the Robin Hood tax; from climate change to chemicals regulation.

Additionally, and beyond specific rules and laws agreed at the EU level, member states have collectively absorbed some corporate agendas and adopted them as part of the EU political agenda, such as on economic governance (strict fiscal rules and austerity), the so-called ‘innovation principle’ (undermining precautionary approaches to regulation), and investors’ protection in trade treaties (allowing corporations to sue states for billions in compensation when governments act to protect their people and the planet).

Irish government not immune

The Irish government is not immune to this corporate influence. While the Irish Permanent Representation (its official base in Brussels) is one of only a handful to provide some transparency about the lobbying it receives, corporate interests dominated the data, withIrish business lobby Ibec, Google, and the finance sector all featuring prominently. In addition to its meetings, Ibec sent numerous emails and letters to Ireland’s chief Brussels official over the year.

Meanwhile, Phil Hogan, nominated by Ireland to be an EU Commissioner and who is responsible for EU agriculture policy, is clearly a major target of Irish corporate lobbies. Among numerous meetings with the Irish Farmers’ Association and Ibec, Hogan has also found time for meetings with Ryanair, the Bank of Ireland, and Google.

Contemporary right-wing nationalist rhetoric argues that a strong EU is imposing rules and regulations on nation states, and sometimes it suits member states to play up to this narrative and blame the EU for decisions which are unpopular at home. However, blaming the EU ‘apparatus’ alone is far too simplistic: after all, governments set the EU’s strategic direction, are closely involved in both the drafting and implementation of EU rules, and have the final sign-off on all EU legislation.

Civil society and decision-makers need to wake up to the threat that corporate lobbies, influencing member states, have on EU decision-making. To start to reverse this, action will be needed by governments, national and regional parliaments, and the EU institutions. In particular, we urgently need new models for citizens to both find out more about, and have a say on, the EU matters with which member states are tasked with deciding.

2019 will be a really significant year for the EU with Brexit looming, the European Parliamentary elections due in May, and a new European Commission to be appointed in the autumn. Domestic debates on the role of the EU will only intensify. What better time to discuss the role our governments play, in our name, at the EU level?

The new report, ‘Captured states: When EU governments are a channel for corporate interests’ is available here.

Vicky Cann is a campaigner with Corporate Europe Observatory. CEO is a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy making. Follow her on Twitter @vicky_cann.