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Polyxeni Ntavarinou- Researcher of International Trade

Business is business:

Economic Interest Groups and the European Policy Process

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Abstract

It is un-debatable that the European Union and economic interest groups have a

significant connection politically and economically. And it could not have been

otherwise; the origins of the European Union where primarily economical and its

historical development into an economic union of free trade, common trade policies and

legislations, free movement of human capital and common currency can only affirm it.

The role of the economic interest groups cannot be undermined either and that is why

their effect on the Union's policy through the prism of institutional opportunities and

restraints provided by the EU will be examined. Therefore, the main objective of the

present article is to prove that ‘European Union's business, is business’ by

demonstrating the dominant role of economic interest groups to the shaping of European

policy and legislation.

1. Introduction

Economic interest groups access in the EU is provided by the institutions themselves.

The chances are that they can influence policy making, as ordinary citizens lack this

opportunity of direct contact. Therefore, the chances are that EU in fact favours

interest groups rather ordinary citizens. This is the hypothesis in which our argument

will be based. In order to verify it, we will start by briefly explaining a few things for

lobbying within the EU. Then, we will examine the content of the White Paper, the

document that gives us the European Commission's view on the role of interest groups

and their necessity. After that, we will talk about the access of the interest groups to

the European Union's Institutions and how interest groups cooperate with them with

the help of data.

After establishing a clear view of the institutional background of our subject

we will try to combine different theories about the relationship of business interest

groups with the European Union. We will finish with an epilogue that will summarise

the conclusions we reached through the process of the present essay.

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2. Interest groups and lobbying in the EU

In the 1980's, the number of interest groups in the European Union became greater

than ever before, making scholars interested in a "sui generis" kind of lobbying. More

than twenty years later, the study of interest groups within the system of the European

Union has been dispatched from the strict eurocentric context it used to be based on.

Lobbying or interest representation in the EU is no longer considered an indigenous

peculiarity but an expected reality. European institutions provide prospects and

limitations for lobbying just like any other political system (Woll, 2006).

In order for someone to understand "interest intermediation" in the European

Union it is absolutely necessary to examine how the european institutions function in

accordance to the phenomenon. Lobbying in the EU has a more "subtle and consensus

oriented approach" in comparison to lobbying in the US. Although both of them are

based on relations between "private" interests and public executives, European

lobbying seeks to establish long-term relations of trust and exchange and is less

aggressive. Also apart from the active representation during legislative procedures

and policy formation, it is imperative that informal pursuit of one's interests is just as

important (Woll, 2006).

However, it seems that the European Union not only realises the existence of

interest groups but also welcomes it as a opportunity for improvements in policy

implementation. In 2001, in an attempt to cater to policy related inefficiencies , the

European Commission publishes the document ‘European Governance- A White

Paper’. The White Paper set the framework for the involvement of different interest

groups in the European policy making. Their involvement would be mainly of

consultative nature, in order to deliver results that would respond to the European

citizens' expectations from the Union.

"...people also expect the Union to take the lead in seizing the opportunities of

globalisation for economic and human development, and in responding to

environmental challenges, unemployment, concerns over food safety, crime and

regional conflicts. They expect the Union to act as visibly as national governments.

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Democratic institutions and the representatives of the people, at both national and

European levels, can and must try to connect Europe with its citizens. This is the

starting condition for more effective and relevant policies. (...) Already within the

existing Treaties the Union must start adapting its institutions and establishing more

coherence in its policies so that it is easier to see what it does and what it stands for.

A more coherent Union will be stronger at home and a better leader in the world. It

will be well placed to tackle the challenge of enlargement. The White Paper on

European Governance concerns the way in which the Union uses the powers given by

its citizens. Reform must be started now, so that people see changes well before

further modification of the EU Treaties." (European Commission, 2001, pp. C287/1,

C287/2)

According to the extract above, EU has its focus on the Union's citizens and

tries to achieve two objectives; first to meet their needs regarding policy

implementation and second to make the contribution of the Union obvious to them.

Therefore, we could say that the European Union's predisposition is to promote the

people's interests and guarantee certain standards of living. The argument is that even

if we accept this as the Union's a-priori goal, the road to its achievement goes through

political and (even more importantly) economy related procedures. Taking this into

account, we could say that it is indeed a case o European Union's business is

business’.

One of the most important aspects of the White Paper is the fact that, in order

to maximise the efficiency of policy making, specialised support is being brought to

the equation. Consultation should be transparent and e ective’. (European

Commission, 2001, pp. C287/12, C287/15) The European institutions that are

involved with different interest and experts' groups are mainly the European

Commission, the European Parliament and the different committees (European

Commission, 2001, pp. C287/12-C287/16).

"...Scientific and other experts play an increasingly significant role in preparing and

monitoring decisions. From human and animal health to social legislation, the

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institutions rely on specialist expertise to anticipate and identify the nature of the

problems and uncertainties that the Union faces, to take decisions and to ensure that

risks can be explained clearly and simply to the public." (European Commission,

2001, p. C287/15)

3. Politics of access

Despite the importance that the White Paper places in transparency, openness and

public awareness of EU's activities, there are arguments on how access to the

European institutions is equally available for everyone. Taking into account the fact

that connections between institutions and economic interest groups have been

growing in importance, what are the chances that decision making is not biased? The

relations between EU's institutions and business interest groups are a vital aspect in

governance-related issues. The access to those institutions is of great significance

since, as many scholars suggest, "systematic variations in these access patterns can

result to biased politics" (Eising, 2007).

Political access has a reciprocal link with resources that both interest groups

and the EU seek. Access to the institutions is granted by frequent contacts between

both parties and they can have the form of informal bilateral meetings with EU

executives and politicians or even committee proceedings. In addition, access could

mean either a successful approach to an institution or the incorporation of an interest

group in the policy making. What moves this mutual dependency is the fact that

institutions and interest groups cannot achieve their goals all by themselves.

Therefore, a relationship of exchange is formed amongst them with information being

the sought after resources. This happens because EU's institutional structure and

objectives rely heavily on external advice for successful policy implementation and

acceptance of their politics (Eising, 2007). Its source of information are think tanks,

interest and international organisations and scientific experts. Business firms are in a

position to offer reliable sources of information on issues such as market integration

and market regulation, standard setting and external commercial policy. On the other

hand, business interests also seek information about the EU especially on market

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policies and try to influence their development because of the way they affect them

(Eising, 2007).

The European multi-level system offers many points of access. The most

important interest point for the EU is the European Commission since it initiates

policy making and monitors the compliance to the community law by the member

states and modifications to the commission's proposal are quite rare when they have

been presented to the parliament or the Council. Also, since it is organised in

Directorates General (the DGs), interest groups maintain relations with one or two of

them and not as a collegiate body (Eising, 2007).

Apart for the DGs, the Council working groups and the rapporteurs of the

Parliament's committees are responsible for proposals and rely heavily on external

information while the Commissioners and the Ministers pay attention only to the

important aspect. Interest groups try to lobby both the working bureaucratic level and

the leaders in order to establish broad policy principles, revise previous decisions or

favour a certain policy alternative. EU's institutionalised forum for interest

intermediation is the European Economic and Social Committee but although it is

considered important in influencing EU legislation it only has consultative role and

directs contacts between institutions and interest groups are more important. (Eising,

2007).

Another advisory body of the EU is the CoR (Committee of Regions) and it is

similar to the Economic and Social Committee. Despite their connection in EU's

decision making, their influence is limited and they can only help in shaping policy as

they have no vote (Hönnige &Panke, 2013).

4. Strategies and opportunities

In order to pursue their interests, interest groups can follow two strategies; litigation

or lobbying, and even a combination of them and there are cases that support all those

possibilities. Interest groups usually prefer lobbying but when a legislative deadlock

occurs, a litigation process is chosen by turning to the European Court of Justice and

less frequently to the European Parliament (Bouwen & McCown, 2007).

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Diagram 1. EU decision making and European Institutions.

Source: Hönnige &Panke, 2013, p. 455.

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Figure 1 demonstrates the frequency of contacts between different EU

institutions (European Commission on all levels, Members of the European

Parliament, European Parliament Committees, the Council of Ministers and the

Committee of Permanent Representatives) and business interest organisations. All

kinds of organisations have the most frequent contacts with the working level of the

European Commission (particularly on the working level), showing that the EC is the

most important addressee of interest group requests. The Council of Ministers seems

to be the one with the least interaction with any of the interest organisations. That

shows that interest groups prefer to address the European institutions that are closer to

the details and the shaping of future policies while using the access to EU's leadership

complementary. Something important that is directly connected to our main question

Source: (Eising, 2007, p.394)

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is the fact that business firms seem to have the most frequent contacts with the

European institutions in general, showing that the national interest groups are more

firmly connected to their domestic background. When it comes to EU associations, we

notice that their contacts are more frequent with the working level of the European

Commission but large firms generally have better access to the Commission's

leadership as well as to the members of the Parliament, to EP committees, the Council

of Ministers and COREPER (Eising, 2007).

So far we have been talking about interest groups but referring mainly to the

business ones. Figure 2 demonstrates different types of interest groups and their

percentage. Interest group population in Brussels is getting more and more diverse

and in total, business groups seem to be dominant. However, "(...) it is too simple to

posit that business groups dominate across all policy domains." (Koen & Katsaitis,

2013). Civil society groups such as NGO'S and SMO's (social movement

organisations) provide expertise of political nature mainly while firms and

professional associations of technical nature. This division is not absolute but it can

Figure 2. Percentage of interest groups per type.

Source: Koen & Katsaitis, 2013, p. 1107.

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explain the existing diversity of the interest groups. Another division has to do with

whether the group is public or private. In general EU policy makers will give access

to the group that they perceive as suitable for the legitimising a particular policy

(Koen & Katsaitis, 2013).

Regarding the NGO's and other civil society groups, the European

Commission seeks to develop a civil society of European character. Scholars refer to a

preference towards "Euro Groups" than individual actors and according to Hull

"Commission officials tend to appreciate a representative lobbyist or interest group

which can speak on behalf of a cross-section of interests throughout the Community."

(Mahoney & Beckstrand, 2011).

Many of those groups receive financial support in order to fix an imbalance

between the representation of simple people's interest and the dominating interests of

business and industry. That way civil society groups can take place, participate, and

survive. Therefore, we could say that the European Union views the support of NGO's

and SMO's as an act of legitimacy. Except from an act of legitimacy, the European

Commission views this as a promotion of the European identity. However, the

preference for pan-European groups instead of groups from new member countries

could be considered somewhat biased (Mahoney & Beckstrand, 2011). Figure 3,

shows the different kinds of groups that receives funding from the EU according to

their type. We could say that it emphasises in groups that have as their main target the

well-being of the European citizen but the dominant ones are the ones that have to do

with the youth and culture. Probably, this reflects the statement above that the

promotion of the European identity is high on the list.

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Figure 3. Groups receiving funding by organisational type.

Source: Mahoney & Beckstrand, 2011, p.1349.

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5. Conclusion

Even though the European Union and the literature around it emphasises on the

unbiased involvement in the decision making, scholars point out that this is not

necessarily the case. According to Eising, there are indicators that point towards the

direction of some kind of elite pluralism. "The analysis of these access patterns is all

the more important because the officials of the European Commission maintain

almost as many contacts with interest organizations as with Members of the European

Parliament (MEPs) or with officials in the Council of the EU. In fact, they are only

more often in touch with national civil servants than with business interest groups."

(Eising, 2007, p. 384).

Koen and Katsaitis on the other hand argue that "(...)it shows that EU system-

level conceptualizations such as elite pluralism, although still applicable at the system

level, do not apply at the sub-system level. Thus the reality that we observe is a form

of chameleon pluralism and the flexibility it offers defines much better the existing

interest representation model for the EU sub-system level" (Koen & Katsaitis, 2013, p.

1117).

My personal opinion is closer to the one by Koen and Katsaitis. Although

there is no doubt that there are more frequent contacts between economic interest

groups and EU officials, it doesn't mean that they serve as the only source of

information. Apparently, the European Union is primarily trying to get the right kind

of information in order to pursue the policies that correspond with its objectives.

Otherwise there would not even be a pretext of transparency or of equality regarding

its openness.

The European Union is not a devil nor a saint. European Union's nature is

primarily economic so choosing to interact primarily with economic interest groups

cannot be surprising. At the same time, we can see that by choosing to fund NGO's

and SMO's of certain characteristics, the Union tries to promote its ideals and to

create a system that is flexible and efficient. Therefore, we could say that the only

thing that the Union is trully "biased" about is the need for efficiency and security in

the sense of stable, long lasting cooperation. Taking into account the current form of

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the EU, we can see that this course of action is determined by its structure and its

interests as an economic union and certainly not by dry favouritism.

The basic objective o the present essay was to prove that ‘European Union's

business is business’ and that the role or economic interest groups is directly

connected with the previous statement. In order to prove that, the operation of

lobbying within the EU was mentioned. Then, we examined the content of the White

Paper and talked about the access of the interest groups to the European Union's

Institutions. Afterwards, two different theories about the relations of business interest

groups with the European Union were isolated as the most suitable to explain their

connection. Lastly, the conclusion was that the European Union's business is business

indeed because of its structure, its interests and its modus operandi.

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