Global Policy Forum

Big Corporations Having Big Influence on EU Competitiveness Pact

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Corporate Europe Observatory (CEO) criticizes the strong influence business is having on the current negotiations on a Competitiveness Pact in the EU. German Chancellor Angela Merkel and French President François Hollande have given the European Roundtable of Industrialists, one of the biggest lobby groups in Europe, a prominent role in the negotiations. CEO is a Brussels based research and campaign group working to challenge the influence of corporate interest in EU policy making.




June 24, 2013 | Corporate Europe Observatory

Mad Men of the Roundtable

Merkel and Hollande have given key positioning to the European Roundtable of Industrialists and their corporate wish-list. They are set to influence a future Competitiveness Pact – a next step towards authoritarian neoliberalism.

Merkel and Hollande are rebuilding the Franco-German engine for the next steps of EU integration. The two core governments are going for a leading role in the creation of new rules on common economic policies, in particular the upcoming Competitiveness Pact. As if to make sure that what they come up with fits neatly with the interests of big business, they’ve invited the European Roundtable of Industrialists (ERT), one of the most powerful lobby groups in Europe, to help them out. In response, the ERT seems to be laying on the table an entire corporate wish-list. If big business gets its way, will 'competitiveness' be the only thing that counts?

First, German Chancellor Angela Merkel invited French President Hollande and Commissioner Barroso to Berlin in March for an encounter with no less than 15 members of the ERT, all of them CEOs from big corporations1. The two governments then selected two ERT veterans, Gerhard Cromme (Siemens) and Jean-Louis Beffa (Suèz), to be chairs of a Franco-German “Working group on Competitiveness”2. While Beffa left the club recently, the choices remain worrying. That's because the demands of the ERT appear to amount to nothing less than putting the European Union entirely at the service of corporations.

Mad men of the roundtable

This is clear from the breathtaking ambition of the ERT's plans, laid out in recent statements, which don't just address a few upcoming proposals, but the entire body of legislation – past and present – that affects business. Their wish-list is all encompassing3:

  • For existing legislation: identification of legislation “which inhibit growth and could be discontinued without affecting fundamental protections.”

  • For legislation going through the decision-making process: an immediate “moratorium on all business-related regulation, including the implementation of existing regulations at the EU and national levels, which has no proven immediate positive effect on economic growth.”

  • For future legislation: the creation of an independent mechanism or body (i.e. no public servants, but presumably with people close to the business community) “to guarantee that all business-related policy proposals are assessed for their expected effect on economic growth and, crucially, also for their initial cost for business.”4. To make sure this body doesn’t just opt for the first version of the proposal, the ERT wants screening to continue all the way through the process, and it even wants amendments to have to be screened.

Franco-German business demands

The report from the EU's Franco-German Working Group is – not surprisingly given its ERT veteran chairs – rather similar5. It says straight out that the European Union should “refrain from introducing new legislative proposals that are detrimental to investments”, as if no other interests are valid. It then goes into the specifics of what reads like a corporate wish-list. In short, the business group wants to see cheaper energy, including by bringing fracking to Europe, reduction of taxation, unrestricted access to raw materials globally, a roll back of the (already very limited) achievements in banking regulation, a further weakening of labour laws across Europe, and a massive strengthening of private alternatives to public services (i.e. privatisation). As working group Chair Gerhard Cromme once famously stated: “Far preferable would be the privatisation of all schools, subjecting them to market forces and thereby encouraging competition: Schools will respond better to paying customers, just like any other business..."6.

In addition to this, there are a few proposals included to remind us that it’s not just any old business community whose interests are to be protected but the largest and most powerful: the recommendations include an attack on attempts by the Commission to stop mergers and acquisitions to prevent monopolies. Clearly in there interest of the very corporations represented in the ERT.

What is their key argument? It’s the big EU buzz word “competitiveness”, of course.

Towards a Competitiveness Pact

The Working Group's report comes at a time when Angela Merkel and Hollande are gearing up to get the other member states to sign up to a “Competitiveness Pact”. That project has been in the pipeline for several months, and for a while interest seemed to be fading. But with the Franco-German initiative, a specific procedure is on the table that foresees a final proposal to be agreed either in December this year or in early 2014 at the EU Spring Summit. At the heart of the pact will be “contractual arrangements” that are to bind member states economic policies to “structural reforms”, such as weakening of labour laws, low wages, business friendly regulation, and much more.

In this field, the preferred approach of the Working Group is simply to have member states commit – by contract – to implement the recommendations that the Commission issues annually on budgets and economic policies. Considering the nature of these recommendations, this is scary.

Stop the mad men

With the European Union continuing along the path of a kind of authoritarian neoliberalism, there is every reason to keep a close eye on the next steps. And the next step is likely to be a Competitiveness Pact, now seriously being fleshed out with big business as the key advisors.

Some might think of the European Roundtable of Industrialists (ERT) as a relic of the past. Two or three decades ago, the club of CEOs of big European corporations would be in on even the biggest decisions on the development of the EU treaty. But with today’s swarming and mushrooming corporate lobbying in and around the EU institutions in Brussels, you might think, the supreme lobby group had taken the back bench.

The Franco-German initiative shows that this is certainly not so. The ERT was always a group that kept its distance from petty squabbles over single pieces of legislation, but instead moves resolutely when the big issues are at stake. This is a case in point. The ERT has outrageous plans that with breathtaking ease they are invited to bring to the table where our future is being mapped. Does this mean that Merkel and Hollande will simply cut and paste their advice into proposals for upcoming discussions at EU summits? Probably not, but letting this group set the agenda to this extent is already a worrying sign, and one that should provoke social movements all over Europe to get ready for a decisive struggle.

Corporate Europe Observatory (2013): Mad Men of the Roundtable.

 

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