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Siim Kallas

Vice-President of the European Commission responsible for Administrative Affairs, Audit and Anti-Fraud

The European Transparency Initiative

Committee on Constitutional Affairs, European Parliament
Brussels, 16 July 2007

Chairman (Jo Leinen),

Honourable members,

Ladies and Gentlemen,

You all know that much-quoted estimate that some 80% of national laws originate at EU level. Some use this figure to paint a picture of a threat to national parliamentary democracy. Others use it to highlight the importance of European co-operation.

Today, I would like to use the figure to advocate transparency during the process of adopting European legislation. Indeed, during our efforts to promote the common European interest in pursuit of the Treaty objectives, we take initiatives that affect interests in various manners. And if the 80% estimate is even half right, the interests affected are quite substantial.

Think for instance of environment legislation; the port and services directives; quotas in fisheries; tariffs in trade policies, the distribution of EU subsidies, or individual cases of merger control and cartel-busting in competition policies; or to be very specific, the recent legislation on mobile phone "roaming".

All these files obviously mobilise interest representatives, or "lobbyists".

Let me be very clear: It is good that we do not take decisions blindly. Indeed, the Commission explicitly recognises that lobbying is both necessary and legitimate.

I would add that lobbying is perhaps even more relevant and necessary for MEPs, since you are entrusted with a direct democratic mandate. One could say that "listening to your constituency", trying to reconcile different interests, is perhaps a more precise term than meeting "lobbyists".

Furthermore, while Commissioners have the advice of officials in our Directorates-General as basis for taking positions, MEPs do not have similar staff support, and I know many MEPs consider contacts with lobbyists as a very valuable source of information and inspiration.

This being said, I believe the Commission and Parliament have at least three things in common.

  • We wish to know who we're really talking to;
  • We also wish to be able to reject accusations that we are subject to any particular bias; and
  • We wish to keep our doors open for interaction with such stakeholders, avoiding the recent US experience where a very visible scandal further eroded public confidence in politics, forcing the House and Senate to adopt very detailed restrictions on interaction between public office holders and lobbyists. I believe we agree on the need to preserve the possibility of working closely together with the world of business and civil society.

So the Commission considers lobbying as legitimate and necessary. But at the same time, we should recognise that some form of lobbying can be deceptive, when, for instance, the real interests behind the effort are deliberately concealed through the use of various intermediaries.

Lobbying can also be unproductive. It is in fact harmful to society overall if it is designed to extract special monopoly privileges, or special rights. Lobbying becomes "unproductive" when "buying" a favourable regulatory environment is "cheaper" than investing in more efficient production. If money is spent on lobbyists, rather than on, for example, research and development or on efforts to comply with agreed rules, then we should all worry.

The figures are quite impressive, even if I cannot confirm the much used estimate that there are 15,000 lobbyists in Brussels. Nor can I give you the global turnover of the profession. But I do know that both are rising fast, with the daily opening of new liaison offices in Brussels. The latest "inflow" was from representatives of energy groups, reacting to the enhanced European dimension of energy policy.

The general idea is, of course, that the EU institutions look at this battle for influence with a cool head: "Via majority votes the will of the people is expressed and then carried out by public-minded benevolent politicians and their loyal civil servants."

But more seriously speaking, we cannot take it for granted that the European public will be convinced by our assurances that the European Institutions are free from, and resistant to, undue pressure. It is a fact, for sure, that we are increasingly surrounded by suspicion. In fact, surveys show that only little over half of EU citizen "tend to trust" the EU institutions. This is not helping the IGC.

So the European Transparency Initiative (ETI) is about that: Increasing public trust in EU institutions. I proposed it within the Commission because my portfolio contains everything that can go wrong in the Commission: fraud, mismanagement of funds, politicized appointments and ethical dilemmas.

So let me explain the content of the ETI:

The lobby register

When I took office, I was immediately confronted by NGOs with a suspicion of bias as to the way in which the Commission runs external consultations. We were told corporate interests dominated over those of civil society.

As a liberal politician from Estonia, I consider myself "business friendly". But as a committed European and designate commissioner, I also believed that critical perceptions had to be addressed.

So what did the Commission decide in its March 2007 communication?

We have decided to create a new voluntary register for interest representatives. This register will be launched in spring 2008.

We are also drafting common elements for Codes of Conduct for relations between interest representatives and the EU institutions. This 'Code' will be a requirement for entry into the register and its compliance will be monitored by the Commission.

With regard to financial disclosure required to join the register, the Commission demands that registrants declare relevant budget figures and breakdown on major clients and funding sources.

I think these principles are quite straightforward. We leave it entirely to the lobbyists themselves to estimate the cost of their lobby effort.

But we have run into a bit of controversy.

Some lobby organisations have challenged the initiative, saying it suffered from a "fundamental misconception that money equals influence". We have never said that. Of course there's no direct, proportional link between money and influence.

Indeed, corporate lobbyists say they spent millions of Euros lobbying on REACH, but still consider they "lost" the political battle to the NGOs. Without taking a position on whether this is true or not in the particular case, I certainly agree that you can spend money and have little or no influence.

But if the lobbying professionals question that money does brings influence, I wonder why they are in business at all? And why does this business appear to be growing? In fact, if spending money on lobbying gives no influence, I wonder what the lobby professionals say to their clients when they bill them?

Nobody would pay real money for lobby without expecting "something" in return – and that "something" is influence! Financial disclosure will be a useful rough indicator of the forces at play.

Another point of criticism, from the public affairs consultancies in particular, is that the Commission is allegedly asking for excessive and discriminatory financial disclosure.

But for financial disclosure, we are not asking for fees or events to be declared. We're simply asking the public affairs consultancies for an estimate expressed in relative weight per client, on behalf of whom they lobbied in the past year. Frankly, this is very light self-regulation, compared to the reporting requirements that some of same companies are subject to when lobbying in Washington DC.

Our proposal is not discriminatory. We have followed the broad consensus that the register should apply to a very wide scope of actors, including public affairs consultancies, corporate and "in-house" lobby units, NGOs, think-tanks, trade associations and trade unions, and law firms.

So there is no crusade against corporate lobbying. On the contrary, I have spoken repeatedly about the power of the NGOs, some of which have limited financial resources, but enjoy being the darlings of the media. They are of course covered by the initiative.

The NGOs have told us they will join the register as suggested. I am grateful for this support, and for their willingness to give a voluntary system a chance to succeed. With NGOs signing up, the public will also be able to see what they receive and make up its own mind whether it is possible to receive public money without losing independence.

Oxfam, for instance, have received € 48 million from the Commission over two years to carry out development and humanitarian projects throughout the world, while simultaneously expressing strong critical views on EU trade policy.

Last year, Friends of the Earth Europe received 50% of their funding from the EU and EU national governments – a high proportion for a "non-governmental organisation". Despite receiving € 635,000 from the Commission, they were initially very highly critical of our car CO2 emission proposals.

The "European consumers" is another important "constituency" that receives public funds. Over the last two years, the European Consumer Office, better known as "BEUC", has received € 2.4 million from us. This is actually only half a cent per European citizen, probably not enough to "buy their vote"...

We also paid Transparency International, a strong supporter of the ETI, some € 120,000 last year. But obviously TI cannot be bought!

Personally, I believe you can spend money on lobbying without having any influence. And you can receive money from the public without losing your independence. But the Commission's idea is that everyone should be allowed to make their own assessment. Transparency in itself is not a judgement.

Honourable members, Ladies and Gentlemen,

The Commission register will open in spring 2008. Some future registrants ask us to ensure that the register would be a joint Commission-Parliament one. We would be very pleased to offer everyone such a "one stop shop". Should you wish to explore this, we would therefore be very keen to hear what your requirements for a joint system would be. The Commission's Secretary-General stands ready to work on this with the Secretary-General of the Parliament.


I take the opportunity to flag a related issue we will perhaps be able to discuss later this year. The European Commission believes a discussion on common ethical values would be useful. Ethical values can guide us safely through the "grey area".

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