ALL across the EU next May, citizens will vote in a new crop of politicians to the European Parliament who will make decisions on thousands of pieces of legislation that affect their everyday lives. But who is really running Europe, and who is really making the decisions?
A book by Irish author David Cronin and a study by a research and campaign group Corporate Europe Observatory say very clearly the politicians and the European Commission are increasingly doing the bidding of big business.
Expert groups that advise on the content of new rules are top-heavy with corporate interests while the revolving door of “experts” moving between big companies, central banks, and political jobs is increasing.
The economic crisis, some argue, has strengthened the hand of the big corporations and that of the financial industry as they insist the future lies in companies lowering their costs to maximise their returns.
This economic model has been adopted by the EU and national governments, but according to other economists and trade unions, the results are not what everybody expected. The troika and the IMF too are a little surprised at some of the outcomes and agree they got their sums wrong when assuming the effect of some of their policies.
While stability is returning to the eurozone and politicians insist there is light at the end of the tunnel — and that Ireland is proof that austerity works — the face of the real economy is changing with trade unions claiming that only the rich are winning.
At the extreme end of the scale is Greece where, after four years of troika policies, people are on average 40% poorer than before the crisis while the very rich have increased their wealth by 20%.
But this development is not confined to poorer or programme countries. Germany introduced schemes that allowed companies to pay tiny wages, around €400 a month and no social contributions, to people who in reality are subsidising these companies with their cheap labour.
This contributes to the fact that in the eurozone generally, half the population has just 6% of the net wealth, while the richest 10% own 50%, a share that is increasing.
Several proposals are being examined that would help by increasing the tax-take of governments and lower their borrowing costs. The commission says €1tn a year is lost to EU governments because big business and the very wealthy are not paying their fair share of tax.
Recently, it set up the Platform for Tax Good Governance to advise it on how to resolve this problem and collect as much of that lost tax as possible. But apart from each government’s tax specialists having a seat on the platform, 80% of the other 15 seats are held by tax advisers and big business interests while there are four NGOs, such as tax justice, one academic, and one trade union.
Tax advisers from the big accountancy firms and their big business clients are unlikely to vote to increase how much they pay, says Corporate Europe Observatory, and they are more likely to favour a model that does not fund the European social system.
There is a similar situation in the expert group established to advise on an idea that is seen as a real solution to improve euro economies — a debt redemption fund and eurobills. This would unite the huge EU economy to help out one another.
The commission’s expert group to advise on how this could work is top- heavy with bankers and representatives of big business. There are no representatives from the trade unions, of consumers, or NGO’s that would provide an economic view different to the one dominating the EU at the moment, says Corporate Europe Observatory.
The composition of these expert groups is publicly available on the commission’s websites but reading it is not always easy.
Last year, the European Parliament refused to agree the budget to pay for them until they got an undertaking that the balance would change.
But a study of the 32 groups and sub-groups set up since then shows, overall, little has changed, especially in the key directorate generals of taxation, secretariat general, and enterprise. Similarly in other big spending areas such as agriculture, research, and important areas such as copyright in the digital agenda.
“The figures speak for themselves: big business occupies two-thirds of all seats not given to government representatives (66%), which is six times the number of seats for NGOs (11%), and more than 13 times the number for trade unions (5%).
“Despite employing two thirds of the European Union’s workforce, 17 stakeholders representing small and medium enterprises (SMEs) make up 2% of overall group membership, with 33 times fewer representatives than corporate interests,” the report said.
The commission has been sensitive to the imbalance but in some instances has reacted by reclassifying representatives. For instance, Business Europe, to which IBEC belongs and which is the biggest business representative in Brussels, holds seats on 55 different expert groups but has been classified in the expert group register at different times as an NGO, a trade union, an association and as an international organisation, but just once as corporate.
Other representatives are labelled as holding their seats in a personal capacity despite them working for obviously vested interests and the study estimates that half of them are not independent. This is particularly strong in the taxation groups where 90% of those sitting in a personal capacity actually represent corporate interests, according to the study.
“The question is whether tax dodgers should be advising on tax havens, beverage companies on alcohol policy, or fossil fuel companies on climate change. The commission gives the impression of government by corporate lobbyists, or a ‘lobbycracy’,” says the observatory.
While the commission has to rely on external expertise in areas it does not have sufficient, the observatory says that the World Health Organisation’s international agency for research on cancer has found a way to address this by banning those with potential conflicts of interest from their expert groups and instead inviting them as specialists to share their knowledge but excluding them from drafting text or voting.
This situation is not confined to the commission — the result of big business lobbying in the European Parliament has been clearly illustrated with MEPs putting forward amendments in their own name that have been written by the lobbying industry employed by vested interests.
New EU ombudsman Emily O’Reilly has declared war on the lack of transparency, especially in the European Commission, on who exactly is influencing policy and especially on the “revolving door” issue.
© Irish Examiner Ltd. All rights reserved