The extent to which transnational corporations (TNCs) increasingly exert economic and political power at the expense of national governments is becoming more and more apparent. However, what very few Europeans are aware of is the systematic way in which TNCs, through bodies like the European Roundtable of Industrialists (ERT), have been instrumental in completely shifting the emphasis of European Union (EU) policies. No explanation of the EU's current neoliberal economic strategies – which involve promoting an unrestricted ‘free’ market in virtually all fields in the name of international competitiveness – can ignore the activities of corporate lobby groups.
The disproportionate influence of transnational corporations upon European Union policies is therefore not only one of the most serious shortcomings of democracy within the EU, but is also one of the main reasons behind the failure of European social and environmental policies. Yet these problems are virtually absent in the current debate around the revision of the Maastricht Treaty and the future of the EU. This report intends to remove one of the causes for the absence of this much-needed debate: lack of information.
Europe, Inc. is the result of months of research into the attempts of corporate lobby groups to influence European Union policies. It looks at the major actors, and provides information about their overall strategies and successes, as well as their specific activities around the ongoing Intergovernmental Conference (IGC) and the crucial EU Summit in June 1997 in Amsterdam. The report gives a disturbing insight into a side of decision-making in the European Union that is rarely exposed.
The exact extent to which corporate lobby organizations shape specific political decisions is difficult to assess. EU decision making procedures are complex, involving both national and European actors. The institutions of the EU itself – the Council, Commission and Parliament – are obviously far from monolithic. Interviews with European Commissioners and other high-level EU decision-makers could have made the picture more complete. The writers of this report attempted but did not often succeed in penetrating the layer of smooth-talking press spokespersons protecting Commissioners from people asking difficult questions. However, we think that these examples of close cooperation between corporate lobby organizations and EU decision-makers are too telling to ignore. And the fingerprints of corporate lobby groups on EU policies are too frequent and too clear to brush off.
This report shows only the tip of the iceberg. Hopefully, it will inspire journalists to dive into these matters which have gone unnoticed by the media for far too long. It should spark a reaction from those European politicians who are seriously committed to democracy. And we hope that it catalyzes action on behalf of citizens’ groups working for social and environmental justice all over Europe – action not only directed at the undemocratic structures that have permitted this strong role of corporate lobbies, but also targeted at the negative impacts of corporate power.
The EU – and most prominently the European Commission – has shown itself to be very receptive to the political agenda of corporate lobby groups. While unemployment figures in Europe have risen above 20 million, social and regional inequalities are growing, and the destruction of the environment is accelerating, the EU continues to speed up the process of turning Europe and the whole world into a single free trade zone. A ‘logical’ prerequisite for following this path towards economic globalization is the fundamental restructuring of Europe’s economy to make it globally competitive. Social cuts and dismantling of public services (related with the single currency), the environmentally-destructive large-scale expansion of infrastructure, and the deregulation of biotechnology are just a few examples of what comes to pass when international competitiveness becomes the overarching goal.
The EU’s role as a motor for globalization does not work in the interest of the majority of European citizens. The global market will unleash a downwards spiral of competition on wages, social and environmental protection. The EU’s push for free trade and deregulation necessitates the removal of government powers to intervene and regulate the workings of the market in the public interest. The only sure beneficiaries of this truly irresponsible economic experiment will be transnational corporations, whose grip on the European and global economies is steadily increasing. Today, two-thirds of world trade is controlled by transnational corporations.1
This increased economic dominance of TNCs should be a matter of great concern. Flexible and footloose as they are, TNCs profit from economies of scale; they centralize and automate production; and they relocate to regions with lower wages and more relaxed regulations. They are champions in increasing production while destroying jobs. In a globalized economy, governments have little choice but to do their best to attract investments. This entails adapting regulations and freeing economic resources to serve the needs of corporations, at the expense of people and the environment. Corporate lobby groups are working at full speed in order to tell politicians how this can best be done.
This report begins by introducing the European Roundtable of Industrialists (ERT), probably the single most influential corporate lobby group in Europe, representing 45 chairmen of European TNCs. In the first section, we will also present two lobby organizations that can be considered offsprings of the ERT: the European Centre for Infrastructure Studies (ECIS) and the Association for the Monetary Union of Europe (AMUE). This section also describes two institutions which hover around the borderline between the European Commission and the ERT: the Competitiveness Advisory Group (CAG) and the Transatlantic Business Dialogue (TABD). Finally, the first section introduces a number of the most influential of the numerous corporate lobby groups operating in Brussels: the European employers’ organization UNICE, the biotechnology lobby group EuropaBio and the »green« industry lobby World Business Council for Sustainable Development (WBCSD).
The second part of the report concentrates on the priorities and activities of the ERT and UNICE around the EU’s Maastricht Treaty revision process, expected to culminate in June 1997 in Amsterdam.
In the third section, we introduce a number of other actors on the Brussels lobbying scene: UEAPME, which represents most European small and medium sized companies; the trade union umbrella ETUC; a new coalition between industry and environmental groups called European Partners for the Environment (EPE); and finally an overview of the environmental lobby in Brussels.
The fourth section is a case study on corporate welfare and describes how TNCs benefit from EU Phare and Tacis subsidies for economic transition in Central and Eastern Europe.
The fifth and final section seeks to explain which structural and political factors enable corporate influence, and ends with recommendations about how to limit corporate control in Europe. In order to understand the reasons for the disproportionate influence of corporate lobby groups and to discover ways out, political decision-making structures must be addressed, and the dominant economic role of TNCs in increasingly globalized European economies must be challenged.
1. One-third in intra-firm transactions and the other one-third in inter-firm transactions. Source: UNCTAD’s World Investment Report 1995. |back to text|