corporate influence on policy all party parliamentary corporate governance group
Number Start time in milliseconds End time in milliseconds Text Number Start time in milliseconds End time in milliseconds Text Good evening and welcome to MONITOR. Ordinary Germans are worried not just German companies. And rightly so. Every day we see a liberalised financial system endangering our economy prosperity and society. Stock markets go haywire markets are out of control hedge funds bet against the Euro. And what about politics? Politicians appear to be helpless and haunted. Even though after the banking crisis in politicians outbid each other with calls for a radical taming of the financial markets. But where are the urgent reforms? Where are the rules to really reign on speculation? Nowhere to be seen. Stephan Stuchlik Kim Otto and Andreas Orth have been looking for reasons. And found lobbyists who did an excellent job. The annual meeting of the International Institute of Finance (IIF). The IIF is the lobby group representing the world’s most powerful banks. Its chairman Joseph Ackermann is a key figure. If you are asking yourself why banks have not been asked to pay more for the costs of the financial crisis why they aren’t regulated more these are the people you need to ask. Bankers are in party-mood. They are well connected. They have created a lobby system which is close to perfection. Take one example: the Commission in Brussels. This is where European laws are drafted. Proposals for these laws are developed by expert groups. They should be independent. But almost all of the experts are lobbyists from the financial sector. One of many examples is the expert group on banking regulation which is made up almost exclusively of representatives from the banks. “The Commission has invited non-governmental experts who give advice on its financial regulation policies. out of these experts are from the financial industry.” Myriam vander Stichele member of the expert group on banking issues of the EU-Commission The effect is first of all a continuation of the situation that has caused the financial crisis. The financial lobbyists have got a grip on regulators. They can get their position across really clearly and as a result the decisions made reflect what they want to see. Ackermann and his powerful global-banking-lobby the IIF are doing a good job. They have succeeded in preventing stricter rules for banks. In Brussels they seem to have a lot of influence not only on the Commission but also on the second most important institution the Parliament. Draft laws which end up in Parliament are already favourable for the banks. In the Parliament they are voted upon and polished. Since each of the MEPs has the right to make amendments the banking lobby targets everyone who is responsible for financial legislation. Even Sven Giegold who is member of the Green group and the committee for economic and monetary affairs. He has been bombarded with their proposals. The financial market lobbies are really successful. This can be seen in the fact that amendments drafted by them which they send to more or less all relevant MEPs actually make it into the legislative process. Very often these texts are tabled by colleagues and then effectively discussed. Just one of many examples: Burkhard Balz an MEP from Germany’s Christian Democratic Party (CDU) has submitted several amendments which reflect proposals from the financial industry. The evidence is clear. The financial lobby proposed deleting an entire paragraph intended to curb excessive speculation. Balz also deleted the same paragraph. We have simply compared your amendments with papers from lobby organisations. And you can actually see that you have copied their suggestions one by one. This can actually not be the case and it has actually not necessarily been like this. As I said I look at many things and then I decide which amendments I am going to table. Yes but you have even copied the original text. The line of argument is completely identical. Yes yes that’s all well and good if other groups have an opinion and I happen to have the same opinion.It may well be that from time to time this opinion is in line with the view put forward by the financial industry. The explanation given by Markus Ferber MEP from the Christian Social Union (CSU)’s is even more creative. It wasn’t that he adopted the stock market lobby’s proposals they adopted his. The stock exchanges submitted a proposal which coincided with my thinking. I was not aware that this found its way into a policy paper. I also only noticed that later. In fact this cannot have been the case. The proposal put forward by the stock exchange lobby group dates from December and is in English. A crucial paragraph about restricting shortselling was going to be diluted. This passage can be found in Ferber’s proposals dated a month later almost word for word and also in English. These are facts – but the MEP insists that somehow his ideas were stolen. “I do not understand this Mr. Ferber not really.” Yes but what else should I say? They produced a paper the proposal: this is how we imagine it. I talked with them. In future I won’t talk to them. Because I’m not prepared to put up with someone – excuse me – taking the piss out of me. I talked to them I developed a few ideas about how you could do all this they included it in their position papers. Do you think I feel great about this? Ackerman and his banking lobby group the IIF have got their clutches on the Commission and the Parliament in Brussels. And when it comes to the heads of state in the Council the boss attends in person. As was the case during the big crisis summit in July for the latest rescue package for the Euro. Not only had Angela Merkel said that the banks which made good money in Greece had to contribute their share to the rescue operation. the banking lobbyist in chief Josef Ackermann was allowed to sit at the table when the deal was being done. After the meeting he claimed that the banks would have to pay a heavy price. “Yes this hits us hard. These are write-offs of % which we accept on positions on Greek positions.” What Ackermann kept to himself was that the claimed loss was in fact a huge success. MONITOR has seen the his lobby group the IIF’s papers. Before the summit IIF had defined exactly % as their favoured scenario and had prepared the detailed figures. Later much of it found its way into the final declaration of the heads of state and government. Even the German government’s chief economic advisor thought that this has gone too far. The economic expert Wolfgang Franz would have asked private creditors i.e. the banks to pay far more. The German Council of Economic Experts had proposed private creditor participation of around %. If you look at the % and our demand for a % participation of creditors the financial sector has been very successful. If you look at the % and our demand for a % participation of creditors the financial sector has been very successful. Around financial lobbyists with an estimated budget of million Euros put pressure on Brussels. If they continue to have as much success in future this will call the entire European idea into question. We are seeing a lot of proposals about more power going to unelected bodies so more power would go to the European Commission through the new economic governance scheme or other ideas about new bodies. So indeed this combination of finance lobbyists’ privileged access and the gap between the voters and the decisions taken These two factors combined result in a very serious threat to democracy. In the meantime the grand question is whether the society should serve the banks or whether the banks should serve the society. The banks only come home when they are out of money. Then our governments give them more. A quote by MONITOR? Far from it. A quote with which the ultraconservative British publicist Charles Moore initiated an exceptional self-critical discussion within conservative circles. Frank Schirrmacher co-publicist of the conservative FAZ even asked recently: Is the left right after all?