Why should we care?
In theory, we are all equal before the law. In practice, the largest financial firms, have an outsized influence when it comes to making the laws for the financial sector – in other words for themselves! The result is a vicious cycle – as financial firms get more powerful, they are better able to set rules that suit them and allow them to become more powerful!
A financial sector that has an outsized influence on rule-makers blocks our ability to tackle society’s urgent issues. Giant private financial firms will choose policies which favour their profit above those that favour a greener, fairer society. The lobby imbalance has many faces, from the enormous disparity in resources to groupthink and the revolving door.
Corporate Europe Observatory in 2014 estimated that: “In total, the financial industry spends more than €120 million per year on lobbying in Brussels and employs more than 1700 lobbyists.”
In contrast, Finance Watch, one of the few civil society organisations (perhaps the only) dedicated to financial reform in Brussels has an annual budget of less than 2 million Euros.
What should we change?
There are many steps we could take, even within the current lobby system, to even up the playing field. First, we could improve transparency around the legislative process in the EU and in all the decision-making bodies, from the Eurogroup (which astonishingly for such a powerful body publishes no minutes!) to records of MEPs and Commissioners showing who spoke to whom, for how long, and about what! This would not be enough on its own, but it would be a very good first step!
As Kenneth Haar (Corporate Europe Observatory) put it as part of a campaign for the 2019 European Elections:
“There is a need for more transparency around the financial lobby in Brussels, but transparency is not enough. We need measures that can push big banks and hedge funds out of their present role as de-facto advisers to the Commission, to the European Central Bank, and to members of the European Parliament.”