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. Their fury can’t be that intense. A rumour that Snowden was on a flight to Bolivia was sufficient for France to block the plane in question from its airspace.
There have been hints, too, that a planned trans-Atlantic trade agreement could be in jeopardy as a result of the controversy. And yet negotiations aimed at clinching such a deal opened this month, as if nothing had happened. With many of the world’s most powerful corporations adamant that the talks go ahead, they are 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 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”. This means that special tribunals would be set up to allow corporations 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.
The British politician Peter Mandelson must shoulder some of the blame for the extremist agenda now being pursued. In his then role as the EU’s trade commissioner, Mandelson published an official blueprint called Global Europe in 2006. It committed the Brussels bureaucracy to work in tandem with corporations in order to remove any obstacles that they encountered throughout the world.
The blueprint incorporated many recommendations made by pressure groups such as the European Services Forum (ESF). Binding together Microsoft, BT, Veolia and – at the time – Goldman Sachs, the ESF has its origins in the “battle of Seattle”, that 1999 conference of the World Trade Organisation best remembered for 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” (his term) were unable to attend important meetings in Seattle because of the demonstrations outside their hotel. Kerneis did not allow this display of people power 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 turgid phrasing of some ESF briefing papers could not conceal how they were designed to turn some of the wildest capitalist fantasies into reality. One paper 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 a corporation from sending profits made in a particular country abroad (to, say, a tax haven).
As they were drafted before the financial crisis which 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 which they identified. 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, 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 who are active in India should enjoy “national treatment” – that they be treated exactly like Indian firms. Britain’s industrialisation was achieved at least partly because the textiles sector was shielded from foreign competition. Blinkered by neoliberalism, 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 write the script is not confined to trade policy.
A few feeble attempts to regulate banks have been made by the European Commission in recent years. This followed a period when Charlie McCreevy, the EU’s single market commissioner from 2004 to 2010, displayed a deep aversion to oversight. McCreevy’s hands-off approach can be attributed to the fact that the “experts” he appointed to guide him held exorbitantly-paid posts in 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, that one 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 11 members, however, were sitting or former bankers – or, worse again, weapons salesmen.
Financial service whizzkids are held in awe by EU policy-makers. This much became apparent during 2009. Boris Johnson, London’s mayor, hopped on the Eurostar train to Brussels that year in order to champion the City of London. Predictably, Johnson grabbed the headlines; away from the glare of publicity, 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 to it. Sharon Bowles, an English Liberal Democrat 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 begs the question as to 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 resembles the US more closely.
Because of its clout, 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.
But we should not forget who started all this nonsense about there being no alternative to slash-and-burn economics. It was a divisive and destructive prime minister called Margaret Thatcher.
Though Thatcher had a famously tetchy relationship with the EU institutions, her ethos now pervades Brussels and other European capitals. 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.
David Cronin’s book Corporate Europe: How Big Business Sets Policies on Food, Climate and War will be published in August. It can be pre-ordered now from Pluto Press.
A version of this article was published by New Left Project.