Financial industry spends €120m a year lobbying EU

The financial industry spends at least €120m a year influencing new rules designed to prevent another crisis, according to a new study.

Financial institutions employ about 1,700 people in some 700 companies in Brussels ranging from public affairs/relations consultancies, industry federations, and lawyers to lobby for them.

They also dominate 15 of the 17 expert groups established by the European Commission to advise on shaping policy and rules.

More than 70% of all advisers in the expert groups have direct ties with the financial industry. NGOs, including consumer bodies, hold less than 1% of the seats and trade unions only 0.5%, according to the report.

Only in two expert groups, which are specifically dedicated to consumer issues, did consumer bodies hold the majority of seats.

The British financial industry is the most heavily represented, with more than 140 organisations active in EU lobbying; 65 are American while 20 are Irish — the sixth largest number from an EU country.

The 20-page report was drawn up by the Brussels office of the Austrian Trade Union Federation, the Austrian Chamber of Labour, and the Corporate Europe Observatory.

The financial lobby also outspends all other groups by a factor of more than 30 and outnumbers other such bodies by five times.

There is a similar imbalance when it comes to meetings, with financial representatives having seven times more encounters with EU institutions than NGOs, trade unions, and consumer groups put together, the report states.

“We believe this is a serious problem for democracy, not only in that money buys influence, but that the financial industry that has caused so much havoc is able to shape legislation designed to reform the sector,” the report states.

“This situation is an extremely risky one for society at large, if it is allowed to continue.”

The report finds that less than half the financial sector lobbyists were registered with the EU, which is a voluntary move. “The register is seriously flawed as it is not a truly mandatory register. Lobby groups can decide not to register with no serious consequences,” it states.

A separate report found that more than half the 1,700 amendments tabled by MEPs on laws regarding hedge funds and private equity firms had been prepared by lobby groups.