MEPs: banking lobby is a 'danger to democracy'

Euro statue

It comes in response to what is described by the campaign as the ‘danger to democracy’ of the financial lobbying industry.
The idea for a new body, which has been likened to a ‘Greenpeace of finance’ by Canfin, is to address what is seen as the lack of a ‘sufficient counter-power’ to the banking lobby, compared with the environmental or health sectors, where many NGOs and pressure-groups seek to influence the law-making process.
The appeal, which has been signed by local, regional and national politicians from across Europe, adds that discussion of the financial industry invariably takes place within the context of the “close proximity between political and financial elites”.
European Parliament (EP) Socialist and Democrat member Pervenche Berès echoed the sentiment. Talking to Public Affairs News, she said the overlap between some decision-makers and the organisations from which they receive policy advice meant they were “too close to talk”.
Berès, a co-initiator of the call and chair of the EP’s employment and social affairs committee, said the banking and financial sector’s claim that it was best-placed to advise on economic policy was “the argument it has been using for 30 years to defend self-regulation”.
Berès said the initiative is intended to “stimulate debate” so different actors can “mobilise and organise” themselves and create an effective alternative lobby.
Corinne Lepage, a member of the EP’s Alliance for Liberals and Democrats in Europe (ALDE) group, also supports the idea. Drawing on her experience in environmental policy, she told Public Affairs News: “In the financial domain, as well as the scientific one, which I know better, there needs to be multidisciplinary, pluralistic expertise. For each question there needs to be a ‘for’ and an ‘against’. It is in the general interest to do so.”
Reacting to the Canfin-led call, Helena Walsh, who is head of lobbying firm Cicero’s Brussels office, defended the links between European politicians and financial lobbyists, saying that MEPs “do not have the same concentration of civil service advisers and specialists as is available to an MP [in the UK]… it is only natural that there is a certain level of reliance”.
She said: “Prior to a life in politics, some MEPs have very established careers in the financial services space, while other MEPs are dealing with issues such as over-the-counter derivatives, short-selling, Solvency II and alternative investment funds for the first time. Therefore it is the job of individual firms, industry groups and trade associations to meet advisers and MEPs and educate them on the impacts of the legislative proposals on the table.”
But Walsh, who worked for almost five years as a political adviser to the EP’s economic and monetary affairs committee, said MEPs are often ignored by lobbyists in favour of the European Commission, in which “many financial companies and trade associations invest considerable amounts of time”.
MEPs frequently lack an “independent assessment” of the detail of Commission proposals, she said, and so she would “absolutely support” the setting up of an independent body to provide “in-depth quantitative and granular findings”, although perhaps in the form of a “well-resourced financial services think-tank [rather than] an NGO advisory group.”
Savvas Parselias, an account manager at the agency Hume Brophy, which has worked on various EU financial services dossiers, said he would welcome the creation of a “genuinely expert body – particularly one that would be transparent about its objectives, funding and legitimacy”. Such an organisation would be a “very constructive addition to the EU debate on these issues”, he added.
The campaign for a counter-lobby comes as Europe begins to emerge from the financial crisis, and the debate on what action should be taken to prevent a repeat heats up.
EU president Herman van Rompuy called for a system of European economic governance earlier in the year, a suggestion likely to encounter resistance in the UK. British PM David Cameron has said he opposes transfers of power from Westminster to Brussels.

REACTION: European Parliamentary Financial Services Forum
“The European Parliamentary Financial Services Forum (EPFSF) believes that in order to guarantee a discussion as open and balanced as possible, it is essential to bring together different stakeholders.
“Our objective is to organise debates where all participants can express their different points of view, including representatives of consumer groups. We also believe that it is crucial to abide by governance principles such as transparency and inclusiveness and give them concrete meaning.
“The financial industry sector might not be able to fill all the gaps regarding the diversity of sources of expertise, but it can foster conditions enabling an open dialogue and improved transparency.”

Catherine Denis is director of the EPFSF, which acts to ‘facilitate and strengthen’ debate between MEPs and the financial industry

30th July 2010 by Kevin McCann