Corporate Europe Observatory

Exposing the power of corporate lobbying in the EU

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Addicted to risk

The banking lobby in the European Union is waging a successful battle against regulation that will undercut international Basel rules. They’re succeeding in putting competition and the right to risky bets before concerns for financial stability.

This year the European Union is expected to adopt new rules on banking. In 2008 when the financial crisis broke, legislators promised bold reforms and public expectation was high. In view of the dire consequences of the collapse of big banks across Europe, now was the time to make up for the omissions of the past and fix the rules to avoid speculative excesses.

Today, more than three years later, those new rules are in the pipeline, but few expect them to be much of an advance. At the international level, the banking lobby watered down proposals for international rules, – called Basel III – and these showed so little improvement that it was hard to imagine the European Union could go lower.

Even so, thanks in part to lobbying by the banks, the proposal tabled by the Commission and discussed by the European Parliament and in the Council at the time of writing, is indeed weaker, driving standards lower than the global level.

With a draft heavily influenced by the banks, any fight for improvements will be an up-hill battle. And in this case it’s hard to imagine the outcome will even live up to weak international standards. It is high time to ask whether banks should be responsible for setting the standards for banks, and whether indeed they should be allowed to set the terms for the debate on banking regulation.

Read more in Corporate Europe Observatory's report "Addicted to risk" (download pdf below).

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José Manuel Barroso's move to Goldman Sachs has catapulted the EU’s revolving door problem onto the political agenda. It is symbolic of the excessive corporate influence at the highest levels of the EU.

In the run up to the UK referendum on EU membership on 23 June, Corporate Europe Observatory has tabled a series of freedom of information requests to find out how UK finance lobbies have been influencing the referendum negotiations and the Capital Markets Union. But the Brexit-Bremain referendum seems to be a freedom of information black hole.

The UK financial sector spends at least €34 million per year on lobbying in Brussels and employs more than 140 lobbyists to influence EU policy-making, according to a study published today by Corporate Europe Observatory. From December 2014 to May 2016, UK financial sector lobbyists had 228 lobby encounters with elite European Commission officials.

This summer Greece's financial authorities fined 20 hedge funds for speculating against the Greek economy. Now, the main global lobby group for hedge funds is trying to tweak the EU's rules so they can have a free play in the future.

A few weeks after the May coup against Dilma Rousseff by conservative parties backed by the country's largest corporations, Brazil's “interim” government, led by Michel Temer, signed an emergency loan to the State of Rio de Janeiro to help finance infrastructure for the 2016 Olympics. The bailout was conditional to selling off the State's public water supply and sanitation company, the Companhia Estadual de Águas e Esgotos (Cedae). 

When we interviewed City Councillor and chair of Rio’s Special Committee on the Water Crisis Renato Cinco, in December 2015, he was already warning against such privatisation threats and provided important background information on the water situation in Rio.

José Manuel Barroso's move to Goldman Sachs has catapulted the EU’s revolving door problem onto the political agenda. It is symbolic of the excessive corporate influence at the highest levels of the EU.

Corporate Europe Observatory, Friends of the Earth and LobbyControl today wrote to Martin Schulz, President of the European Parliament, calling on him to investigate Angelika Nieber MEP over a possible conflict of interest.

CEO presents some first reflections on the UK's vote for Brexit.

 
 
 
 
 
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The corporate lobby tour