By David Cronin | New Left Project | July 18, 2013
Edward Snowden has exposed more than a massive spying operation. The whistleblower has – perhaps unintentionally – drawn attention to just how obsequious Europe’s political leaders are towards the US.
Angela Merkel and François Hollande are reportedly furious over revelations that America has been reading their diplomats’ emails (though their fury can’t be that intense given that a rumour that Snowden was on a flight to Bolivia was sufficient for France to block the plane from its airspace). There were hints too that a planned trans-Atlantic trade agreement could be in jeopardy as a result of the controversy. Yet the talks have opened this month as planned. With many of the world’s most powerful corporations adamant that the talks take place, they were unlikely to be derailed by a spat over snooping.
In May this year, a ‘business alliance’ to support the planned trade deal was established. Many of the firms belonging to this coalition – BP, Coca-Cola, Deutsche Bank, British American Tobacco, Nestlé – have been involved in similar initiatives since the 1990s. Using a highly dubious methodology, the alliance estimates that a transatlantic trade and investment partnership (known by the ugly acronym TTIP) would bring benefits of €119 billion to the EU and €95 billion to the US per year. What they don’t spell out is that the price of any such benefits could be the destruction of democracy.
A leaked document detailing what EU officials wish to achieve in the negotiations says that an eventual agreement should include ‘state-of-the-art’ provisions on ‘dispute settlement’. Under this plan, special tribunals would be set up to allow corporations to sue governments over laws that hamper them from maximising their profits.
When clauses like those being envisaged have been inserted into previous investment treaties, corporations have invoked them in order to challenge health and environmental laws that were not to their liking. Australian rules that all cigarettes be sold in unattractive packaging and Germany’s decision to abandon nuclear power are among the measures that corporations have tried to torpedo in the name of ‘investor protection’.
What will the masters of the global economy take on next: minimum wage levels; restrictions on hazardous chemicals; food quality standards? All of these advances are the results of struggle by workers and campaigners. All of them could be at risk if European and American negotiators go ahead with their plan to set up a special court system that corporations alone may use.
Peter Mandelson must shoulder some of the blame for the extremist agenda now being pursued. In 2006, when he was EU trade commissioner, Mandelson published an official blueprint called Global Europe. It committed the Brussels bureaucracy to work in tandem with corporations to remove any obstacles they encountered throughout the world.
The blueprint closely resembled recommendations made by pressure groups like the European Services Forum (ESF). Bringing together Microsoft, BT, Veolia and – at the time – Goldman Sachs, the ESF has its origins in the 1999 conference of the World Trade Organisation, best remembered for the ‘Battle of Seattle’ – the large-scale protests against it.
In The Brussels Business, an excellent film about corporate lobbying, the ESF’s Pascal Kerneis waxes emotional as he recalls how some ‘high-VIPs’ were unable to attend important meetings in Seattle because of the demonstrations outside their hotel. Kerneis, however, did not allow this display of people power to weaken his determination to refashion the international economy in the way that his elitist pals wanted.
In his dealings with Mandelson’s team of advisers, Kerneis argued that if the EU is unable to have the wishes of corporations fulfilled at the WTO level, it should concentrate on twisting the arms of individual governments. The stilted phrasing of some ESF briefing papers though could not conceal that they were designed to turn some of the wildest capitalist fantasies into reality. One advocated that the EU should strive to remove all capital requirements for banks and caps on foreign ownership of companies in its key trading partners, as well as any pesky rules preventing corporations from sending profits abroad (to, say, a tax haven).
As they were drafted before the financial crisis that erupted in 2008, these papers have a carefree, almost naive feel to them. And yet the European Commission is still striving to attain the core goals identified in such documents. The Commission’s latest annual report on ‘trade and investment barriers’ says that all ‘relevant instruments and policies’ will be marshalled worldwide ‘to make sure the playing field is levelled’. On the surface, that may sound innocuous. In practice though, it means that corporations are accorded more rights than human beings.
If an Indian arrived in Heathrow Airport tomorrow and demanded to automatically have the same entitlements as a British citizen, he or she would probably be arrested. Yet the EU executive believes that big Western companies active in India should enjoy ‘national treatment’ – that is they should be treated exactly like Indian firms. Britain’s industrialisation was achieved at least partly because the textiles sector was shielded from foreign competition. Yet blinkered by neoliberal ideology, Brussels officials want to prevent poorer countries from applying the same tactics, which they now describe as ‘protectionist’ (a dirty word, according to these ideologues).
The willingness to allow corporate lobbyists to set the rules is not confined to trade policy. Financial regulation too has been heavily influenced by the world’s most powerful banks.
Charlie McCreevy, the EU’s single market commissioner from 2004 to 2010, displayed a deep aversion to oversight during his time in office. His hands-off approach can be attributed to the fact that the ‘experts’ he appointed to guide him held exorbitantly-paid posts at the investment banks Goldman Sachs and Morgan Stanley. A consultative group on hedge funds that the Irishman assembled was comprised entirely of insiders from the financial services industry.
When Michel Barnier was tasked with taking over McCreevy’s portfolio, Nicolas Sarkozy (remember him?) contended that giving this post to a Frenchman was a defeat for the Anglo-Saxon model of capitalism. Like many of Sarkozy’s proclamations, it was fanciful. Barnier has kept up the dishonourable tradition of relying primarily on advice from the private sector. An ‘expert group’ on banking reform set up at his behest last year had a token representative from the European Consumers’ Organisation (known by the French acronym BEUC) and a couple of academics. Most of its eleven members, however, were sitting or former bankers – or, worse still, weapons salesmen.
Financial service whizzkids are held in awe by EU policy-makers. This became much apparent during 2009. Boris Johnson hopped on the Eurostar to Brussels that year to champion the City of London and predictably grabbed the headlines. Away from the glare of publicity, however, an army of hedge fund managers succeeded in eviscerating a law designed to restrain their gambling. When the law went before the European Parliament, the hedge fund industry prepared a voluminous set of amendments. Sharon Bowles, a Liberal Democrat MEP who chairs the Parliament’s economics committee, admitted to me that she signed amendments drafted by the financial industry and then tabled them in her own name. This obviously begs the question of whether she is really working on behalf of her constituents or on behalf of banks.
The corporate lobby has proven adept at concocting myths. Whereas it was patently obvious that the economic crisis was caused by the reckless behaviour of banks, powerful groupings have spread the falsehood that extravagance in public spending was really to blame. The European Roundtable of Industrialists (ERT) – which includes the chief executives or chairmen of Shell, Volvo, Nestlé, Vodafone and Heineken – has been leading efforts to demolish the welfare state. Among its core demands are that healthcare should be privatised so that Europe more closely resembles the US. The ERT enjoys the kind of access to top-level politicians that defenders of the underprivileged are denied. Herman Van Rompuy, the EU’s unelected ‘president’, is known to have dined with ERT delegations in private clubs, without any details of these encounters being posted on his website. And in March this year, Merkel and Hollande, along with the European Commission’s head José Manuel Barroso, met ERT representatives in Berlin. The ERT is pushing the Union’s governments to agree on a ‘competitiveness pact’ over the next twelve months. Under this pact, each EU country would become obliged to drive down its wage levels and dilute its labour laws.
‘Competitiveness’ is a byword for crony capitalism. It should not be confused with competition: among the ERT’s demands are that the EU becomes less fussy about controlling mergers between large companies. Far from encouraging diversity, it wants to have wealth concentrated in increasingly fewer hands.
Repeated so often, the idea of ‘competitiveness’ has assumed an almost religious significance among the EU elite. Opposing it is regarded as heretical.
Despite Thatcher’s tetchy relationship with the EU institutions, the main tenets of Thatcherism have gone mainstream in Brussels. Attempts made in earlier decades to give the Union a social dimension – by, for example, championing gender equality – always amounted to fig-leafs for a project that was essentially right-wing and anti-democratic. In more recent years, these fig-leafs have become increasingly slender.
Barroso is among a new generation of leaders who are demonstrably in thrall to the ‘Iron Lady’. While he habitually describes the EU as a ‘social market’ economy, it is evident from his favoured policies that his real agenda is to bolster corporate power. One key objective of the European Commission is to promote ‘public-private partnerships’. This idea of handing over services financed by taxpayers to unaccountable companies can be traced back to Thatcher and her successor, John Major.
With few exceptions, the Union is cuddling up to big business and screwing the rest of us. Building a mass movement to confront corporate power has never been more urgent.