Thread by @AllianceBE

The excellent @ALTEREU have blown the lid off how decisions are made in Brussels. Forget the cuddly PR machine. The EU is in thrall to corporate interests and professional lobbyists that, behind closed doors, shut out competition from challengers and SMEs.

A THREAD

2/ A 2014 investigation into the size of the financial lobby in Brussels
found that banks, investment funds and other financial companies had at least 1700 professional lobbyists at their disposal. This means financial lobbyists outnumber MEPs by around 2.5 times!

3/ And the lobbying is growing, fast. A sample of seven financial industry associations and companies, estimated in 2014 to have a combined 88 lobbyists, in 2018 have 115 people involved, according to Transparency Register data on LobbyFacts.

4/ Lobbying is a big money business in Brussels. In 2014 an investigation found the industry spent an annual €120 million lobbying the EU. There are no accurate figures produced for the 2018 costs but, given the increase in lobbyists this is now likely to be much higher.

5/ Financial corporations dominated a growing number of so-called
‘expert groups’ set up by the Commission to help make this plan
a reality. Roughly 80% of the advisers in these groups were representatives
of financial corporations, banks particularly.

6/ This approach became highly contested in the aftermath of the financial crisis, not least because in several cases a link could be traced between the advice of financial industry lobbyists and weak legislation that left the EU open to financial meltdown.

7/ In the midst of the crisis, the Commission set up a high level group to provide advice. Of the eight men that comprised the group, four had intimate links with big banks: Goldman Sachs, BNP Paribas, Citigroup and Lehman Brothers itself.

8/ The Commission directorate in charge of financial services (DG FISMA) had 92% of its meetings in the first half of 2016 with large corporate interests. Even the ECB's ‘Banking Industry Dialogue’, is comprised solely representatives of big banks.

9/ Its a cosy set-up. With the change of Commission in 2009, 3 Commissioners took lobbying positions in finance: BNP Paribas welcomed Meglena Kuneva, the Royal Bank of Scotland took Günter Verheugen on board, and investment company NBNK brought in Charles McCreevy.

10/ This pattern was repeated at the next change of guard: former competition Commissioner Neelie Kroes to BAML, and former Trade Commissioner Karel de Gucht to two investment funds. A year later, the 2 time Commission President, José Manuel Barroso, joined Goldman Sachs.

11/ Goldman has quite the hold over the EU. Indeed it has more than a few prominent EU decision-makers on its payroll, including former Commissioners Peter Sutherland and Mario Monti, former Commission President Romano Prodi, and current ECB President Mario Draghi!

12/ Last but not least, the first Commissioner for financial regulation, the UK’s Jonathan Hill, who left his post after the Brexit vote in 2016 now advises Swiss
bank UBS, insurance giant Aviva and Deloitte on EU regulation.

13/ There is an intertwined job swapping culture which brings about rank conflict of interest. Four of five DG FISMA directors who left their posts between 2008 and 2017, went to work for companies they once oversaw, or their lobbyists.

14/ Banks drive EU legislation. Even when big banks were in public disgrace over the financial crisis, some MEPs confessed openly to Corporate Europe Observatory that they were in regular contact with financial lobby groups, who had helped draft amendments. Who regulates who?

15/ In 2010, the EU attempted to introduce new financial stability rules. The biggest banks teamed up in mid 2010 to produce a report designed to invoke fear: the plans being made for banking regulation would, it said, lead to 0.6% lower annual growth, and unemployment to match.

16/ Shortly afterwards the Bank of International Settlement ran its own report rubbishing and debunking the report from the banks. However the EU had quietly shelved the proposals. They were not revived.

17/ The EU turns a blind eye to manipulation of capital adequacy ratios (designed to protect stability). DB changed its model and suddenly appeared €28 billion healthier! This isn't available to small banks, who have to stick to a standardised way of identifying the requirements

18/ The launch of the Liikanen report, led to calls for new measures on ‘banking structure’, including how to avoid excessive risk-taking. In October 2017, after 4 years of frantic lobbying by banks, this was dropped - despite the existence of equivalent rules in the US

19/ Since the climax of the financial crisis in late 2008, the European banking sector has become more concentrated: 25% of credit institutions have vanished, while the biggest have got bigger. This means more influence in less hands and less dissenting voices.

20/ MEPs have stated on occasion that bank lobbyists actually do them a favour, because getting their heads around the issues would be costly in terms of time. What future for democracy when banks control the information our politicians hear and thus control the way they vote?