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The corporations that run the European Union

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Issue 1726

Why trade unions are protesting In nice

The corporations that run the European Union

By Kevin Ovenden

THOUSANDS OF trade unionists and anti-capitalist campaigners were set to demonstrate at the European Union (EU) summit in Nice, southern France, this week. Their protests highlight the central divide across the continent-between workers on the one hand and giant corporations (and their political allies) on the other.

That is why this was one protest against European Union policies that William Hague’s Little Englander rabble did not support. The Tories and their friends in the anti-European press claim that the EU stands for taxes on business, greater workers’ rights and generous welfare provision. Many trade union leaders and Labour politicians in Britain hope to get such policies from the EU.

The truth is that the EU is as committed to free market neo-liberalism as other powerful international organisations such as the International Monetary Fund, World Bank and World Trade Organisation. And it is as entwined with big business as the New Labour government is. The driving force behind its free market policies has been the European Round Table of Industrialists, which draws together some of the most powerful companies in the world.

It was founded in 1983 and consists of 47 bosses of European multinationals. Membership is by invite only. Companies currently represented include Nestl, Unilever, GKN, BP Amoco, Renault, Marconi, ICI, Olivetti, BT, Pilkington and Fiat. Gerhard Cromme is a vice-president. He is also boss of German steel maker ThyssenKrupp, which he helped form by a merger which cost thousands of jobs last year.

He recently spelt out bosses’ thinking in Britain and Europe about education. He attacked the “culture of laziness which continues in the European education system”, where students “take liberties to pursue subjects not directly related to industry. Instead they are pursuing subjects which have no practical application.”

He suggested that all schools be privatised to encourage competition, because “schools will respond better to paying customers just like any other business. The provision of education is a market opportunity and should be treated as such. This could also help to change social attitudes.”

This ultra free market dogma is already guiding education policy in the EU and its member states. Viviane Reding, European commissioner for education and culture, says, “Public-private partnerships will play a crucial role and will constitute a key factor in our success.”

Europe’s multinationals wield enormous influence on the EU. They dominate its working parties on issues such as “competitiveness”, where they have succeeded in winning policies on flexible working, deregulation and privatisation.

Business got its way at the EU’s Lisbon summit in March of this year through a combination of influencing European institutions and working hand in glove with national governments. The New Labour government in Britain led the charge for less regulation of business and fewer workers’ rights across Europe. Three months later corporations held a European Business Summit. Over 1,000 corporate bosses and EU officials gathered in Brussels. The president of the European confederation of employers’ organisations, Georges Jacobs, said, “This platform has shown the convergence between the priorities defined by the heads of state and government in Lisbon, and the objectives of business leaders.”

GM food companies were at the summit. So too was the EU commissioner for health and consumer protection, David Byrne, formerly of the corporate lobby group the International Chamber of Commerce. He told them that Europeans are “inadequately informed on biotechnology”, and that business should work with the EU to “build consumer acceptance” of GM foods.

No tax on companies

THE EUROPEAN Commission welcomed a recent report from the continent’s employers’ organisations. It read: “New taxes on energy products or higher taxation on capital should be rejected as they would reduce European competitiveness and attractiveness as a place for investment.”

It called for a permanent reduction of public spending “particularly in the areas of public consumption, pension provision and healthcare, welfare benefits and state subsidies. “Taxation is a threat for business. We would like to get tax levels to the floor.”

Business rules

OVER 10,000 professional lobbyists roam the corridors of EU institutions representing the interests of big business. The European Parliament is even more remote from ordinary people, and more powerless to challenge corporations, than national parliaments.

The European Commission is an unelected bureaucracy headed by 20 people appointed by European states. It, not the parliament, proposes policies. The most important decisions are taken by meetings of government ministers from the EU states.

They bend to business in their own countries and do no different when they get together as part of the EU. Some 3,000 lobbyists concentrate on the European Parliament to make sure it toes the line. That is five lobbyists for each member of the parliament. Two of the main lobbying companies, which boast unrivalled access to EU officials, are:

  • Burson-Marsteller. It set up the National Smokers Alliance (to encourage smoking) in the US for tobacco company Philip Morris.
  • Shandwick. It organised the Global Climate Information Project, which tries to rubbish evidence of global warming on behalf of the oil companies.

Burden on workers

The EU has been about protecting business since it was founded as the European Economic Community. Its links to giant corporations have grown over the last 15 years as those firms have grown bigger through a wave of mega-mergers. Jacques Delors was president of the European Commission, the bureaucracy at the heart of the EU, in the late 1980s.

He is remembered in anti-European papers in Britain as someone who wanted to “impose burdens on business”. In fact he helped unleash the power of the multinationals across Europe.

German and French capitalists at the time did not want to be undercut by companies in Britain and southern Europe where there was less welfare provision. So in the short term they pushed for policies which could seem attractive to workers in Britain facing the onslaught of Thatcher.

But the goal of every giant firm, and of every European government, was to cut welfare, slash taxes on the rich and privatise. That is precisely what they have achieved from Germany to Greece. Bosses talk of following the US model, where the working year is four weeks longer than in most of Europe and healthcare is privatised.

Bosses heart of EU

THE EU and big business are so close that individuals can move easily from one to the other.

  • Tory Sir Leon Brittan set up the Transatlantic Business Dialogue as EU trade commissioner in 1995. It is made up of over 100 executives from major corporations in Europe and the US, and pushes for deregulation of trade and finance.

Brittan is now vice-president of Warburg Dillon Reed, a subsidiary of UBS, one of the biggest banks in the world.

  • Brittan’s replacement, Pascal Lamy, was second in command at the bank Credit Lyonnais in the late 1990s, where he pushed through redundancies and oversaw its privatisation.

Lamy wants to see greater privatisation and deregulation. He is calling for a resumption of the World Trade Organisation talks, which are aimed at slashing the few remaining government restrictions on multinationals.

  • Former EU commissioner Peter Sutherland became chairman of investment bank Goldman Sachs and is now a director of oil giant BP Amoco.
  • Martin Bangemann was the EU commissioner for industry in 1994 when he set up a working group on European telecommunications.

Six of its 20 members came from the European Round Table of Industralists. Telecom companies had heavy representation. There was no one there from consumer organisations or telecom trade unions. Bangemann is now a boss with the telecommunications giant Telefonica.

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