On the Lobby-Go-Round
Glen Newey
In a letter to his constituents published in the Spectator during the 1975 referendum campaign on the UK's membership of the Common Market, Tony Benn outlined five 'basic democratic rights' that were 'fundamentally altered by Britain’s membership of the European Community'. The fifth of them was the right of citizens to dismiss our political masters. As the European Commission president, Jean-Claude Juncker, put it last year, 'there can be no democratic choice against the European treaties.' Nowhere is this more obvious than in Juncker's Commission, the body that governs EU affairs without needing a parliamentary majority. Effective power devolves on the commission and Brussels's smoothly oiled lobby-go-round.
Commissioners are nominated, one per member state, by government leaders. Often, as with Neil Kinnock and Roy Jenkins, they are clapped-out politicos. Others, such as Lord Hill of Oareford, the current UK commissioner, were never elected to start with. Hill and David Cameron worked together for John Major's government. In 1998, Hill co-founded the PR and lobbying firm Quiller Consultants; clients with government contracts include PricewaterhouseCoopers and the 'welfare to work' contractors A4e.
Given a peerage by David Cameron in May 2010, Hill became an education minister and oversaw the sell-off of a Cornish school's playing fields to Tesco, a Quiller client (Quiller was taken over by Huntsworth in 2006, but Hill retained an undisclosed stake). 'The proposed development would significantly enhance the learning experience of the pupils at the Academy,' he wrote. Lobbying is always easier if you can sit on both sides of the table.
Since 2014, Hill has been the commissioner for Financial Stability, Financial Services and Capital Markets Union. The portfolio's a biggie, as the EU plans to integrate capital markets across the union by 2019. Part of the idea is to expand investment vehicles for business to free up bank capital for small firms and personal loans. Hill was no sooner in post than he put out a green paper on the deregulation of Europe's capital markets: 'We want to get the market for high quality securitisation going again in Europe,' he said. A commission 'fact sheet' from last year manages to avoid referring at all to the part played by securitised sub-prime loans in the 2008 crash, even though the formula for bond creation – fractionalising bundles of loans on a risk-graded basis – remains the same.
'Lots of brainy people', Hill said, 'think it is possible to come up with a framework that will be more transparent, and more stable and enable people to see more clearly where the risk is.' Hill and the commission seem blithely confident that a risk assessment regime can be put in place, its spectacular failure before the crash notwithstanding. In a speech in March, Hill called for 'reduced bank capital requirements for securitisations'. No doubt brainy people in Hill's 'cabinet' are busy devising a plan for neutralising asset toxicity in the coming period.
Between December 2014 and March this year, in his capacity as commissioner, Hill held more than 160 meetings with lobbyists, including such players as HSBC, Goldman Sachs and the British Bankers' Association, as well as the Association for Financial Markets in Europe (AFME), a lobbying group which spends around €7 million annually (in total the UK finance sector spends at least €34 million on EU lobbying). The ostensible goal is to diversify investment by reducing European firms' reliance on bank capital rather than equity financing, but the underlying agenda seems to be to facilitate high-risk investment. As the AFME's chief executive Simon Lewis puts it, the goal is 'to foster a stronger culture of responsible risk-taking'; Lewis deplores European 'risk aversion' and the lack of openings for venture capitalists compared with the US.
The finance sector is but one head of the European lobbying hydra, with about 2500 organisations and 15,000 individuals active in Brussels. The European Round Table of Industrialists drafts prospectuses that the Commission has on occasion adopted more or less wholesale, as with the Trans-European Networks infrastructure project.
Before he was elected in 2010, David Cameron said that corporate lobbying was 'the next big scandal waiting to happen'. He was talking about corporate pressure on MPs at Westminster. But, as Benn would have said, at least we can throw them out.
Comments
Don't disagree with the rest of it..
For details read Gillian Tett's excellent book "Fool's Gold" (reviewed by Donald MacKenzie in LRB of 25 June).
And don't get me started on Credit Default Swaps...
Participatory democracy alone is where citizens will once again be called upon to participate in policy and the cutting edge laws that govern their economy and taxation and home and community buildings and public and national safety.
Britain now has been sold off by successive Conservative, Labour and Lib Dem Governments to the most virulently destructive forces of capitalism, and the majority of British citizens are treated like the mass disenfranchised lumpen lot as it was always historially the sad fact in Britain except for the short period of time after the Second World war.
The EU is controlled by nations and interests as this writer has shown, untrammelled economic and political power that has wrought disgraceful suffering in the vulgar "austerity" word that stands for "evil" and "suffering" and disgrace in Britain and the EU.
Paritcipatory democracy will alone bring in the grass roots fairness and awareness and enlightenment values dangerously and totally off the British and EU landscape now.
And Britain will do this only if out of the mad clasp of the undemocratic, mad, greedy, corrupt and deceitful management of the EU by the few once again in Europe, Merkel and Germany and those she appoints to do her bidding. Britain does not stand any chance to influence or lead therein and Merkel and all others know that fully well.
Britain has to leave the EU and build democracy within to have peace and security and a stable nation.
One political party and one block of it will be unable to hold all power and keep a tenacious hold when their base is seriously fractured from within their own political party as in the Conservatives now.
Boris etc running Britain unendingly painted as the greater fear and risk than the Merkel and German dominated EU with their ongoing savaging of the poorer EU nations and the yet to come vast compounding of terror and breakdown of the EU democracy and sovereignty and peace that they have wrought by the grab allowed by reckless default by the weak and easily bullied EU nations once again and the weak Chamberlainesque British failure and lies once again as in Cameron and Osborne.
Day after 23 June if Britain votes to Remain, Merkel will be out in full colours and splendour and the wreckage and onslaught will be uncontrollable and untrammelled.
What has transpired in the last few years in the EU can bring nothing other than this totally predictable menace, horror, reality and consequence.
On the EU continental mainland, most silently know there will be war in Europe, the breakdown of the Rule of Law and democratic governance is so massive, especially since the ongoing earthquake Merkel triggered in 2015 that all can see will for certain get much more violent and destructive, yes once again in Europe.
Boris can and will be replaced, Merkel and Germany in undemocratic control of the EU to do as now, as they bully, decide and diktat, is outside of any and all democratic controls and processes in the EU and will be sealed as Britain's horrific fate once again.
And this from one who was an avowed believer and dyed in the wool supporter of the EU.
Yes, here in Den Haag it's all we talk about: total strangers stop one another on the street and crowds gather spontaneously on corners to look anxiously Eastward for the storm clouds of war massing on the horizon.
With the greatest respect, your foam-flecked (yes, I know I have said it before) apocalyptic visions are becoming a little tiresome, based upon, apparently, little first-hand knowledge of what life is really like on the "EU continental mainland" [sic]. I don't know where you glean your information from, but a little social unrest does not make this a repeat of 1848.
"Weak and easily bullied EU nations"? What, like Hungary and Poland at the moment (whose attitude is basically "Refugees? Sod off.")? Or the Austrians, threatening to unilaterally close the border with Italy (and sod the Schengen agreement)? Are you serious? The EU members states are at present a pretty fractious bunch, particularly in the East. Weak they are not. Interestingly, though, you don't hear much from Italy or Spain: the Italians just seem to be getting on with the hard work of dealing with refugees, quietly and without making a fuss, expecting no thanks in return - exactly what they get.
Perhaps you could dial it down a bit? Or at least back up your assertions with a bit of good old LRB analysis?
1. "the politically inevitable backlash of German voters over having been hosed by their fiscal client states" - as I have pointed out elsewhere in the LRB blog (more than once), there was nothing politically inevitable about Germany's response to the Greek debt crisis. German voters were not being "hosed" by Greece until Merkel (prompted by Schäuble, no doubt) took over debt owed by Greece to German banks, notably Deutsche. Until then it was a simple scenario of profligate banks* lending to unreliable borrowers. Merkel and Schäuble made it first a German and then an EU issue, adopting the spurious moral high ground and developing the bogus scenario of thrifty German savers being rooked by devious and spendthrift Greeks. This was and remains an abuse of Germany's position in the EU.
2. In once again adopting a high moral tone about the refugee issue ("Wir schaffen das"), Merkel exacerbated popular objections to the refugee crisis, rather than producing any real solution to it. I am sure she thought to provide moral leadership, but grandstanding is no substitute for the hard work of diplomacy. Furthermore, the idea that you can shame, say, Viktor Orbán into doing the right thing is pretty laughable. Donald Trump may talk about building walls, but the man that Hungarians (admiringly!) call "The Viktator" has already built 4 metre high razor wire fences along his country's borders with Croatia and Slovenia.
Perhaps this 'nice old lady' is losing her touch?
*Let us also remember at this point that Greece only originally acceded to the Eurozone by fiddling the books - with the aid of Goldman Sachs - giving her the financial street cred to borrow all that dosh in the first place.
Britain has been unable to contain Germany in any diplomatic, treaty, "mutuality" discourse and balance. See Chamberlain and pre First World War containment sans any "sitting down at the table" by Britain and Germany.
Britain has only contained Germany after the brutal loss of millions of lives and two World Wars all in the most gruesome and living memory.
Britain is the English speaking nation in the EU where disproportionate numbers desire to enter as the stepping stone to the USA. Britain unlike all other EU nations is id free, so once in, an open door to access. In most EU nations id control is paramount, in place for everything whatever the exchange, and so inflows from other EU nations is hugely controlled and manageable.
Access to all social services is dependent on that national id which has to be current and ratified regualrly to be acceptable for everything from visiting the doctor, the emergency services, the library, almost all commercial transactions.
Even national citizens have to turn up every few years and have their id picture retaken, the id renewed and validated.
Britain's internal structures for economic rationality and social services is in such massive disarray and disfunctionality anyway and being the major magnet as the major by far English speaking nation in the EU so that with education and jobs here incomers have access to seek immigration to the USA and to global jobs and life.
Britain lacks the internal structure for a parallel standing alongside the other EU nations to withstand free movement and open entry because the tools for adequate governance as the major English speaking magnet for 550 millions EU nationals are fundamentally unmanageable and anyway even the basics for such proper governance are totally internally absent here.
"Britain is the English speaking nation in the EU where disproportionate numbers desire to enter as the stepping stone to the USA."
Is there any evidence for this? If so, perhaps you could point to it?
"Britain unlike all other EU nations is id free,"
That may well be true in a sense, but it depends on what you mean. When I lived in Belgium, I was required to carry a national identity card, on pain of a fine. Here in The Netherlands, all those over the age of 14 are required to be able to identify themselves with picture id (which can be a student card, driving licence or other accepted form of id), but there is no formal, compulsory national id card as in Belgium.
I would also point out that for a migrant to work legally in the UK they have to have (a) a work permit, (b) a residence permit and (c) a National Insurance (social security) number, as is the case in most EU countries.
Have you actually checked out the systems in all the other 25 EU countries we haven't covered between us?
"so once in, an open door to access."
Aha, yes, "once in": the UK has the most stringent entry requirements of any EU country. In any case, every country has its illegals who work cash in hand under the radar and are serviced by a network of people who provide them with housing, etc., usually at a premium.
"In most EU nations id control is paramount, in place for everything whatever the exchange, and so inflows from other EU nations is hugely controlled and manageable."
In the countries in which I have lived, this is actually horseshit. If you go to a doctor or hospital here, they will ask for your medical insurance details, because that's how the system works. It is not a form of social control. The indigent, however, are treated free.
"Access to all social services is dependent on that national id which has to be current and ratified regularly to be acceptable for everything from visiting the doctor, the emergency services, the library, almost all commercial transactions."
Almost total horseshit, at least here in NL. Every resident has a unique social security number, if they are registered. This is used for voting rights (as in the UK), by the tax system, etc.
"Even national citizens have to turn up every few years and have their id picture retaken, the id renewed and validated."
Completely false, except in the sense that, say, my driver's licence, which I most often use as ID requires renewal every ten years.
It's been a pleasure to set you straight...
As a postal voter I have cast my vote to remain, mainly on the basis of a re-invigorated social chapter and the protective guarantee of talking through the financial difficulties as between members that will arise. But the single market, with safeguards as to probity, will succeed by drawing in investment of both supply expertise and new business. There can be no expansion and betterment of the standard of living without this.
The problem is not the undemocratic set-up of the Commission but the fact that the disparate interests high and low cannot be reconciled to purpose without some form of edicted decision making.
But we do not want a FIFA Europe so there must be exceptions and opt-outs to see us on to maturity, peace and co-operation.
Such an idealised view is necessary to put in place peaceful relations between the peoples of Europe.
But I should nevertheless wish that Glen would join the Commission.
More generally, whilst it’s odd and not particularly encouraging that the Commission has the sole right to initiate legislation, the need for the legislation to be approved by the Council of Ministers and, generally, by Parliament must be a strong, and significantly democratic, influence.
My inclination has been to vote to remain, for reasons including risk averseness and the value of strong international co-operation in an interconnected world. That inclination is not strengthened by the way the EU works, including what is revealed in this piece.