Former German Secretary of State

Aspects of Participation and Lobbying

Lobbying in EU-Brussels

What do we mean when using the word “lobbying”? It is something like interest representation influencing political decision making. The French paper Express (2006/02/17) published a dossier (“La casserole à pression (s)”) on lobbying in EU-Brussels. It contained a headline: “Une menace pour la démocratie?”. The EU-Commission’s Estonian Vice-President Siimi Kallas wrote a short article for the Wallstreet Journal, also in February (look on his web-site). The last sentence reads like this: “Because there is nothing wrong about lobbying, there should be nothing to hide.”

From lobbying on national scales we know that lobbyists rather follow an advice, which goes like this: “Learn to complain, even if you are not suffering”. Because in the longer course of history lobbyists made the experience that decision-making politicians might put burdens on them. So they should use complaining as a precautionary means: if they complain, additional burdens might be avoided. And decision makers learnt from the same history another lesson: “If you want to make dry land out of a swamp or marsh territory, don’t ask the frogs for help or advice.” I’ll come back to this lesson later.

With these experiences in mind we now look into EU-Brussels. And there exists a book by Rinus van Schendelen: “Machiavelli in Brussels, The Art of Lobbying the EU.” (Amsterdam University Press, 4/2003). This book tells a story, which gives a background for understanding the attitude of Vice-President Kallas.

1.)There are some 15.000 lobbyists in EU-Brussels, representing some 2.600 organised interests. They come from 25 countries inside the EU and some countries outside, too, and many international organisations. Lobbying therefore comprises a community which is multicultural and multinational. If a lobbyist wants to work successfully in this environment, he or she must form alliances or coalitions, make compromises, be open minded for other points of view than his or her own, be considerate and constructive and co-operative – and establish the reputation to be a serious and reliable partner.

2.)Then, there is a EU-Bureaucracy. Excluding the language and technical staff, it is in number smaller than the community of lobbyists in spite of all complaints about the European Bureaucracy! This bureaucracy has to deal with 25 different regulatory backgrounds, if it is to deal with a common problem of the single market. It is not able to work without a tremendous lot of information brought in from outside. Communication is a huge necessity for the EU’s staff. So the European institutions have an incredible number of committees, (2.500+) in which outside experts try to clarify the difficulties encountered when producing “regulations” acceptable for 25 Member States. These committees consist of many lobbyists, who are eligible due to their knowledge and their reputation in their community and with their communication partners in the EU-bureaucracies.

3.)This “social mechanism” of communication takes care of representing the interests of 25 national populations. And by doing so, they unavoidably have to seek “European compromises”. European integration is a by-product of this communication process, something like a loyalty for Europe is born, which might compete with the national loyalties most lobbyists and bureaucrats continue to have.

4.)This means: Lobbying for particular interests inside the EU is part of the process of forming a democratic, efficient and integrated Europe.

This sounds too good to be true? (!!!) ? My short summary of Rinus van Schendelen`s book is certainly simplified. Mr. van Schendelen by the way is teaching European public affairs management. He is teaching lobbyists. Maybe he wrote from the perspective of a “frog”? And now we have to deal with a difficulty. Frogs might be right. Protection of environment is protection of biodiversity. So we need swamps. And we need lobbyists, too. But we should remain aware of their interest oriented attitudes.

For the problem of lobbying we have to ask whether there are only frogs. May be there are other animals living in the swamps, too. And they might be more powerful and in addition able to hide their “pressure”, due to this power. May be “crocodiles” like lobbying, but do not like transparency, which inside the EU and especially for supranational democracy is a “must”. “Crocodiles” might be the CEO`s (Chief Executive Officers) of Global Players. Do they talk with the bureaucrats or do they have a chief of staff, calling for his Big Boss, to make a special and “private” date with a Commissioner or even the President or a Vice-President? Or they might talk to a national chancellor or president and ask them to tell the leaders of the European Institutions, how they could see and understand the relevant problems “correctly”.

That’s what seems to be the “menace to democracy” and the books on the art of lobbying the EU do not contain any evidence of such behaviour, because this behaviour prefers to remain “unpublic”. Even if we share this critical point of view, there is an interesting detail about the article of Vice-President Kallas. It was provoked by a lobby-scandal in Washington DC: A certain Mr. Abramoff had tried to behave as a “crocodile” and by his efforts the leader of President Bush´s Republican party in the Senate was lobbied and corrupted. This became “public” and the “democratic” reaction was: “Go”! And that’s what the Abramoff affair brought about for Senator Tom Delay: he had to go, because something was wrong with his being lobbied. So it should not have been published.

If transparency remained the dominant attitude in EU-Institutions also for (or better: against) “crocodiles”, then their lobbying would have to change, too, and they would have to conform with the “art of lobbying” described by Mr. van Schendelen.

Two weeks ago a new committee was formed by Vice-President Verheugen. It will deal with Energy for Europe. There will be five “crocodiles” on the committee, representing giant European energy firms. But no “frogs” from renewable energy producers. We will see what transparency will mean for this committee. At the same time the EU Commission took steps against 17 national governments (out of 25), because they failed to install competition-regulations on energy distribution markets, which had been previously agreed upon, also by the Member States. Great Britain has been compliant, it has such regulations. But BBC reported just now: energy prices in GB are nevertheless higher than in most other countries. So competition between “crocodiles” might not be quite the same thing as between “frogs”? Maybe Mr. Kallas’ transparency will tell us some day!

Sustainability

It is a difficult word, for sure. If we look into EU papers dealing with the topic, we find a short definition: Sustainability is, when meeting the needs of the present generation is not preventing future generations from meeting their needs. That is: we must not take away non-renewable natural resources, damage biodiversity, change the climate by global warming, deforest continents and turn them into deserts, make glaciers and ice­caps on the poles of the earth disappear and thereby raise the level of the seas so that coastland and islands disappear under water. And water, air and soil (fertile parts of the surface of the earth) must not be used as deposits for damaging or poisonous sub­stances, which we might produce, because we do not care for risks, which come about due to lack of research permitting to gain certainty. This is the ecological sense of the word “sustainability”, something that could be expressed in a mathematical equation, but is in fact a program for changing the way our economies work. The equation reads like this: Min/Max A + B + Zero C + D = Sustainability. Min/Max A stands for minimising the amount of non renewable raw materials to be taken out of nature and for maximis­ing the recycling of the non renewable raw materials which have been taken out of na­ture in the course of history of mankind. “B” stands for making use of renewable natural resources, however not exceeding their reproduction rate. Zero C stands for reducing the deposition of poisonous or damaging substances in environment to zero. “D” stands for the burden of proof related to substances which are not known in their effects on the natural environment. If risks are to be taken they should be insured against damages by commercial insurance companies and no state laws should pro­tect these companies by putting “ceilings” on the theoretical costs of greatest possible accidents or errors (as is presently done in dealing with nuclear risks). This formula of course is the “ideal” of sustainability in an ecological sense. Preserving the environment might be identical with long term economic interests. But in order to get there up from the present state of the economy means to engage in transitory processes of ever more internalising costs.

Externalised costs of using natural resources will prevent future generations to meet their needs because too much apparently cheap resources are used. As a process, internalising costs will need time. So for some time sustaining economic pay off of investments might still be detrimental to social and ecological sustainability, because society would have to accept that these investments must earn their “costs”. Transition means compromises. And these compromises need transparency!

Clashing Sustainability Interests

Maybe an article in Financial Times of March 28th 2006 (page 15) illustrates best, what is meant. Its headline was: “The curious paradox of American corporate lobbying.” Its author, Michael Massing, believes, that the US automobile industry was lobbying against its own long term interests. At present every car produced by General Motors or Ford brings losses, not profits to the firms. After the price rise of gasoline, the low energy efficiency of the SUVs (sport and utility vehicles) became much more expensive, therefore, customers no longer want to buy them. All efforts to improve this energy efficiency during the past two decades by government regulation had been stopped by lobbying. Now the Japanese firms in the US compete with own SUVs, and they have a much better efficiency and even hybrid motor technology.

A similar story is true for US Electricity companies. They lobbied against demands in Congress that they should provide power from renewable sources. And they did not develop technology for renewable power sources – because of their successful lobbying in the House against the demands from a Senate majority!

American industry also defeated a health reform, advanced by Hillary Clinton. If she had been successful, the US motor industry might be better of today, because now every car produced bears the burden of old age and healthcare costs due to old arrangements with labour unions.

The conclusion in the article by Massing: “It often takes years for the short-sightedness of corporate lobbying to become apparent, but in the short term the gains might seem impressive.” From this we might learn, that defending short term gains might be defeating long term sustainability of capital value. To understand this correctly: it is an attack against short term benchmarking imposed by financial markets!

We should differentiate between commercial capital, nature and social capital. The increase of the value of one type might be detrimental to the other types – in the short run. But in the long run, preserving the value of commercial capital seems to be identical with preserving the value of nature capital. But recent investments of commercial capital would be losses, if they would not get a chance to earn their costs – perhaps even at the costs of nature or social capital. The question whether this happens – and how long it could be tolerated would be a question for “impact assessment”.

Lobbying for social capital takes place at the moment on the streets of Paris and many other French cities. Maybe the French younger population is right in protesting against a new law which is supposed to increase the “flexibility” of young people on the labour markets. This flexibility would certainly be the opposite of the security needed for forming families and rearing children. The ideals of employers organisations of a flexible and mobile labour force would, in terms of human relations, lead to marriages based on weekend relations only and having no time for taking care of babies. Family life, however, is “social capital” without which societies cease to exist. Short sighted commercial interests seem to result in the unintentional destruction of this social capital. But that certainly does not lead into “economic sustainability”.

So the sustainabilities concept (threefold sustainability) runs into clashes of contradictions, if short term commercial interests reign. And it is up to lobbying, to prevent commercial interests from self-destruction by destroying the values of social and nature capital.

It is due to social change, that we have to deal with such problems. They did not seem to exist 50 years ago – though already at that time theories were born about the “limits to growth”. Scenarios came out different in these last 50 years, but the threats of self-destroying economies became more apparent. Hurricane Cathrina seems to have been more convincing than most ecological research about the impact of economic activities on climate change.

Political decision-making on clashing interests of threefold sustainability is on the agenda. EU-Brussels tries to work on it, bureaucracies and lobbyists do it. They try to arrange for reasoning lobbyism - by impact assessments, sustainability indicators, transparency initiatives, communication policies, action planning.

The relevant papers of the EU Commission make sense. Improvements might still be necessary. Lobbyists of all sectors are asked to work on this. The Commission is not yet overwhelmed by participation efforts of democratic citizens. The internet brings about many more chances to “participate in lobbying”. And perhaps EU personnel that is being lobbied must differentiate more clearly between interests lobbying them on the basis of earning money and civil society interest groups which lobby for non-commercial purposes and have to be financed by donations and supported by unpaid work. They might need more helpful access than commercial lobbyists.

But those who are worried about the fate of nature and society, if the economy continues without sustainability innovations should make use of Google and its competitors. Go to the websites of the EU. Load down the unavoidably surprisingly huge amount of instructive papers. And notice, that all three EU-Brussels institutions (Parliament, Commission, Council) have agreed on the Commission´s Guidelines. These are the suggested documents: Transparency Initiative, Sustainable Development Strategy, Impact Assessment Guidelines, White Paper on Communication Policy, Work and Legislative Program 2006. You find them via websites of the Commission.

If we want more democracy, we must lobby for it. This lobbying seems to be welcome and EU-Brussels tries to prepare for it. The British weekly Economist made an appeal to “European leaders” in the last issue of March 2006. The Economist wants them to go to school again. In Finland. Because there the schools are a proof of innovating innovation. And sustainability is only possible by innovating our minds.

Conclusions

By the way: If they should go to Finland, they might look around in Scandinavia. There they would find - in all countries - high economic competitiveness (as measured by the world economic forum,) high employment of the labour force, high participation rates of both, males and female, high taxation rates with states collecting taxes close to 50% of GDP, population highly content with this situation, short term unemployment used for efficient qualifying for the next job, high social transfer payments to the qualifying unemployed, high life expectancy, high health standards, low incarceration rates, low criminality threats and rising birth rates, strong labour unions, aiming for general solidarity distributing productivity gains, supporting educational and social security systems as public infrastructures protected against greedily grasping commercial interests. In sum: Lisbon strategy seems to have been pursued in Scandinavia for 30 or 40 years - successfully. If Eurostat would publish sustainability indicators for the EU 25, we would find the Scandinavian states being top nearly in every aspect. On one point, however, they seem to contradict main-stream economics. Taxation is high and balanced state budgets are used for purposes of paying high employment, especially in education, health and social services. These are run as infrastructures of education and social security. And the relevant innovated word for the result is “flexicurity”.

Maybe, that is what we should be lobbying for. Against main stream economics though. But perhaps that science might innovate its mainstream, too! Semi-religious beliefs in non-empirical model theories might give the wrong long term advice.

Social sciences and psychology know mechanisms of self-deception. Their names are: Cognitive disharmony, selective perception, interest guided cognition. And also: irrational exuberance. Those who believed in a “New Economy” only six years ago fell prey to such mechanism. And the economic science elites did so several times in history, for instance at the end of World War I, the Great Depression from 1929 to 1932. And till today this science community was better in ignoring these “errors” than in making use of psychology which they claim to be 50% of economy. When will they use it for reducing the risk of their errors?

Sustainability will not come about by defending the present state of the three types of capital: Commercial, Nature and Society Capital cannot stay as they are. They exist in interaction. Money is the instrument of power these days. But we have to defend values and not prices. And to defend price stability is not identical with defending value sustainability. Prices can be a helpful instrument. They might be an aim for commercial interests. But they might decrease the value of social and nature capital. And that would be destructive for the economy as the basis for commercial capital, too! So let us hope for the art of lobbying in EU-Brussels, as described in van Schendelen`s book. It will only come about by intensified participation of environmentalist interests, informed by European institutional transparency!