Trade

Big East-West skew in record EU lobbying bonanza

Lobbyists spent a record €1.7 billion influencing the European institutions in 2016, with 95 percent of that figure coming from countries that joined the bloc before 2004, according to an analysis of data in the EU’s transparency register carried out by POLITICO.

At a time when many Central and Eastern European countries complain of a pro-Western bias in lawmaking and in the apportioning of EU benefits — such as the medicines and banking agencies moving from London after Brexit — the data reflect the dominance of firms, think tanks and NGOs headquartered in older member countries but with powerful lobbying operations in Brussels.

“We see that the odds are not exactly in our favor,” said Jan Němec, who is setting up a Brussels-based trade association representing Czech and Slovak transport associations in response to the dominance of trucking lobbyists from Western countries in the Brussels debate about the rights of posted workers — people who move to work in another EU country temporarily.

“If you look at the contact in the [European] Parliament, I have to say the Western view is prevailing there … They know how to lobby, they have resources, they are more experienced,” he said.

Influencers based in Belgium naturally top the list with spending of €427 million because of the preponderance of Brussels-based lobbying operations. Next on the list are Germany-based institutions, who spent €181 million in the last year, followed by the U.K. at €154 million and France at €106 million. By contrast, Poland, which has the EU’s sixth largest population, came in behind Austria, Denmark and Portugal in terms of the amount of money spent by its lobbyists. With Belgium in the mix, 95 percent of the total lobbying spend originates from old Europe, but even excluding that country, the disparity is huge with 93 percent coming from old Europe and 7 percent from countries that joined in 2004 or later.

“It’s inevitable that companies and organizations with greater resources — most of which come from the older member states — are able to invest the most in seeking to influence policy processes,” said Arnaldo Abruzzini, CEO of Eurochambres, a trade association representing 20 million businesses in 43 countries that spent up to €1.6 million last year on lobbying in Brussels.

Some of the disparity may be a reflection of cultural differences between nations. “Countries have different cultures and some countries like the U.K. have a long tradition of lobbying, while other countries know it less and influencing politics is done differently,” said Transparency International EU’s Daniel Freund, adding that the activity tends to be more developed in liberal democracies.

The EU’s transparency register was set up almost a decade ago and is operated jointly by the European Parliament and Commission. It is used by firms, associations and NGOs to officially record how much they are spending on lobbying the EU institutions, as well as state how many people are lobbying for them and which areas of legislation they seek to influence.

The number of lobbying entities on the register has multiplied by 35 since its introduction, with big upticks in the past few years. This is likely due to lobbying organizations acting on draft proposals to make signing up to the register compulsory in order to gain access to the EU institutions. Currently, lobbyists can only access senior officials in the Commission if they are on the register, but that does not apply to lobbyists seeking to influence MEPs and Council officials.

Financial disclosure on the transparency register — as well as all other information provided — is voluntary, and there’s no external audit to check whether companies have understood what is being asked and whether their entries are accurate.

Over the last two years, POLITICO has vetted financial entries from entities listed as high spenders in the register and adjusted any outlying figures based on research into each lobbying entity’s true effort (some firms record their total lobbying spend in the register rather than the amount spent on EU lobbying). By systematically gathering information from the database, the analysis also gives a deep insight into the lobbying environment in Brussels. The research, based on data disclosed on the register as of summer 2017, put the amount spent lobbying in 2016 close to €1.7 billion. The unvetted sum is much higher.

The figure suggests a lobbying bonanza in Europe’s capital that is now approaching spending in Washington. According to the Center for Responsive Politics, a U.S. transparency NGO, a total of $3.15 billion (€2.7 billion) was spent on lobbying the U.S. capital in 2016.

Money talks

The top 20 big spenders include pan-EU trade associations like the European Chemical Industry Council — which tops the list at €12.1 million — and BusinessEurope (€4.2 million). Also among the big money are consulting firms like FleishmanHillard (€7 million), Burson Marsteller (€4.7 million) and Interel (€5 million). The figures are for the rounded upper limit of a range given by companies and organizations in the transparency register.

NGOs complain that they are massively outspent by corporate interests when it comes to influencing legislation. “It is no secret that corporate interest representatives in Brussels outweigh civil society organizations both in number and in the financial resources they have for lobbying EU decision-makers, which has dire consequences for public interest policymaking,” said Vicky Cann, a campaigner at Corporate Europe Observatory (CEO), an NGO campaigning against corporate capture in Brussels.

POLITICO’s corrected data bear this out. Sixty-six percent of lobbying spend comes either from companies themselves or law firms and consultancies working for them. NGO spending accounts for only 19 percent of the total, although within that category some organizations also sometimes share the interests of corporates — for example, the European Digital Rights Initiative, which receives funding from companies like Google and Microsoft or IFOAM-Organics International, which is backed by the organics industry.The rest is made up of research and academic institutions and regional organizations.

Some of the top spenders are trade associations representing financial services sectors, like the Association for Financial Markets in Europe (€4.7 million), Insurance Europe (€7 million) and the European Banking Federation (€4.2 million). Individual firms like Deutsche Bank, Google, Microsoft and extractive industry firms ExxonMobil and Shell also feature in the top 20 lobbyists.

“If you compare all the biggest philanthropies … it’s nothing compared to what states have available as money, and it’s nothing compared to corporates,” said Inge Wachsmann, program manager at the Swiss-registered Charles Léopold Mayer Foundation, which donates around €9 million a year to NGOs such as CEO and Finance Watch, which campaigns on financial services regulation.

The transparency register records how much firms are spending on lobbying the EU institutions | Stephanie Lecocq/EPA

But it is the extent of the disparity between East and West that will likely be most surprising.

For example, firms and NGOs from Morocco, which is currently lobbying the EU institutions on an update to its lucrative trade agreement with the bloc, spent more money than seven EU member countries this year. Kenyan organizations spent more on lobbying than four EU countries (Slovenia, Latvia, Croatia and Estonia).

“We need to be more present here,” said Kinga Grafa, head of the Brussels office of Lewiatan, Poland’s 18-year-old business lobby, adding that there was a growing recognition by Polish industry that having a presence in Brussels mattered.

Grafa is one of the association’s two staffers based in Lewiatan’s Brussels office, and one of four on staff who lobby the EU institutions, with an annual spend of up to €200,000. In contrast, the Confederation of Danish Industry discloses 12 individuals lobbying the EU institutions with an annual spend of up to €1.2 million.

“Government advocacy and lobbying is still not rooted in our political systems,” said Liberal Czech MEP Martina Dlabajová, explaining why so few firms spend money lobbying in Brussels. “We still didn’t get that negotiating and transferring information to policymakers is crucial if you want to make your voice heard.”

“Policy business is a new kind of business for [companies in the Western Balkans]” — Natko Vlahovic, founder of a Croatian consultancy

And the lobbying imbalance extends beyond business. “It’s a fact that trade unions — and presumably NGOs — in many of the newer member states have fewer resources than those in the older, Western European member states,” said Julian Scola, a spokesman for the European Trade Union Confederation, which spends up to €1.2 million on lobbying the institutions.

But for associations representing smaller EU countries that joined the bloc in 2004 or later, a significant part of the challenge is waking up their business communities to the threats — and opportunities — presented by European law.

“It has been a very steady learning curve among Lithuanian businesses to really take developments in Brussels seriously,” said Tomas Vasilevskis, the director of the Lithuanian Confederation of Industrialists in Brussels, adding that there had been a big uptick in interest in “the last three or four years.”

For companies in the Western Balkans, they simply “do not understand to what extent Brussels impacts their policy and regulatory environments,” according to Natko Vlahovic, founder of Vlahovic Group, a Croatian consultancy that recently opened an office in Brussels. “Policy business is a new kind of business for them,” he added.

CORRECTION: An earlier version of this article misstated the trade association being set up in Brussels by Jan Němec. The association will represent Czech and Slovak transport associations.

Original Article

Politico

The post Big East-West skew in record EU lobbying bonanza appeared first on News Wire Now.

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