The European Round Table of Industrialists: how lobbyists changed the history of the European Union

Credits: Digital Encyclopedia of European History

by Silvia Cossa

If most people were to be asked about the words they associate with lobbying, manipulation, corruption, and bribery would come up frequently without any doubt. This phenomenon is explained by the lack, in the public eye, of the connection between the votes cast by the citizens and the decisions taken by the representatives elected, since usually lobbying is exercised by powerful corporations that are not part of the democratic process. Lobbying is a reality that exists both at national and European level, and it is particularly powerful during the policy-making process. This phenomenon takes many forms in Bruxelles, but the European Round Table of Industrialists (ERT) is probably the most notorious one.

History of lobbying in the EU and the birth of the ERT

Lobbying in the EU is as old as the first European communities: the European Coal and Steel Community and the European Economic Community caught the attention of several interest groups. Nonetheless, the turning point for lobbying can be indicated in the negotiations and, later on, in the Single European Act, entered into force in 1987.

The birth of the European Round Table of Industrialists dates back to 1983. At the end of the 1970s and the beginning of the 1980s, Europe was experiencing a period of stagflation, a combination of both inflation and stagnation; moreover, a general lack of vigour and innovation in Europe’s economic activity exacerbated the already negative consequences stemming both from the US and Japan’s growth period, the latter later known as the Japanese Asset Price Bubble, and the multiple emerging economies in Latin America and Asia, namely the Four Asian Tigers. With the clear incapability of the European Community to adopt the right measures to recover from this period of economic crisis, high levels of unemployment, and general declining growth, in 1982 the then-chief executive officer of Swedish car manufacturer Volvo, Pehr Gyllenhammar, decided to take the matter into his hands. Following several meetings with Étienne Davignon, the European Commissioner for Industrial Affairs and Energy, Gyllenhammar, with the support of Umberto Agnelli, CEO of Fiat, and Wisse Dekker, CEO of Philips, reunited a cross-sectoral group of CEOs of widely known European firms. The main aim of the 17 leading European CEOs was to spur growth once again in Europe, enhance competitiveness, and to steer the policy-making process of the European Community’s institutions in a way that would benefit the aforementioned industrialists.

Nowadays, the ERT is composed of some 50 European industrial leaders, namely the CEOs of Heineken, Barilla S.p.A, Nestlé, Rolls-Royce, Eni, Ericsson, AstraZeneca, ArcelorMittal, Leonardo S.p.A, Vodafone Group, Royal Dutch Shell, BMW Group, Michelin, and Mercedes-Benz Group AG. All these companies provide for 5 million jobs globally, 2.000€ billion combined annual revenues and 60€ billion investment in R&D annually. The ERT is able to exert an undeniable influence thanks to the mastering of face-to-face negotiations, especially on the European Commission, mainly because membership of the ERT is personal rather than corporate, and numerous members have personal friendships with political leaders. This special relation is exemplified by 8 letters sent between 1995 and 1998 by Jacques Santer, former President of the European Commission – the tones used in these letters are clearly warm and friendly, suggesting that he had a positive consideration of ERT. As far as the ERT’s structure and functioning are concerned, its agenda is set, by consensus, in the biennial Plenary Sessions, where proposals made by the Steering Committee are analysed and taken into consideration. The Steering Committee is composed of the ERT chair, role currently covered by the CEO of AB Volvo, two vice-chairmen, the former chairman, and five other members elected by the Steering Committee itself. Most of the ERT’s work is done by 11 Working Groups, specialized in definite fields, such as social policy and foreign economic relations.

First example of lobbying: the establishment of the European Single Market

The most significant case of influence exerted by the ERT and its close link with the European Commission is the historical role played by the ERT in the process that culminated into the adoption of the Single European Act in 1986 and the establishment of the European Single Market. In 1984, the Commission put forward a package of proposals that, if approved, would remove trade barriers within the European Community. Nevertheless, Member States were reluctant to approve such measures, since it would entail a loss of national sovereignty. In January 1985, immediately after the installation of the new Commission with Jacques Delors as President, the then ERT Chairman, Wisse Dekker, proposed a five-year plan initiative, called Europe 1990: An Agenda for Action, to eliminate trade barriers, which, if accomplished, would create favourable conditions for industrialists. The pressure exerted by the ERT for the attainment of the European Single Market was a unique opportunity that was seized by the European Commission to deepen integration. Just three days later, Delors delivered a speech in the European Parliament that showed clear similarities with Dekker’s proposal. This led to the publication of the European Industry Commissioner’s White Paper, which became the basis of the 1986 Single European Act, and the legal basis for the establishment of the European Single Market; the White Paper, too, was identical to Dekker’s proposal if not for some minor differences.

Second example of lobbying: the European Union enlargement towards CEECs

Another example of the influence exerted by the ERT on European institutions is the case of the 2004-2007 Eastern enlargement of the European Union. After the collapse of the URSS, a large number of Central and Eastern European countries applied for EU membership. In 2004, 10 countries, among which Poland, Czech Republic, Hungary, Lithuania and Estonia, became EU members, followed by Bulgaria and Romania in 2007. The aforementioned Eastern enlargement was the largest in the history of the European Union. The ERT was considerably in favour of the enlargement, since it would provide an enormous supply of high-skilled and low-wage workers, as well as 150 million additional customers to the Single Market. Therefore, the ERT established a special working group on enlargement, which presented its enlargement action plan on the occasion of the European Council’s Luxembourg Summit, in December 1997, where EU leaders decided to open accession negotiations to a first group of States.