A week's diary: a glimpse behind the scenes in Brussels

6 December 2009

A week's diary: a glimpse behind the scenes in Brussels

It's still not 1st January, but why wait until the New Year when you can carry out your good resolutions right away? So today I'm going to give you the first instalment of a weekly account of what goes on in the European Parliament group, a glimpse behind the scenes in Brussels.

by Dennis de Jong, SP European Parliamentary Group leader

Dennis de JongIn the last week I spent two days travelling abroad with ten other Euro-MPs. The trip took us to Basel and Geneva and took place in the context of the European Parliament's Crisis Committee. In contrast to many, often very long journeys undertaken by ‘delegations’, this was not a courtesy call punctuated by snacks and drinks, but a real working visit. In Basel we got to look into the secret world of bankers, while in Geneva we spoke with the head of the World Trade Organisation (WTO), Pascal Lamy, amongst others. In addition I had a meeting with a representative of the Swiss trade unions.

Was the trip useful? Certainly. The Secretary General of the Basel Committee, a body containing for the most part central bankers, told us that national supervision of banks varies enormously from country to country, within as well as outside Europe. European Finance Ministers decided last week not to institute a compulsory European system of bank supervision, while national supervisory bodies have, as a result of EU measures, limited possibilities to monitor banks established in other countries. So I asked the man whether it wouldn't be better if we could exercise full national supervision, when otherwise we would be stuck with putting our faith in supervision by other European countries. With the Ice Save scandal which accompanied the collapse of the Icelandic economy we have seen just where that can lead. His answer astonished me: he remained vague regarding national supervision, but did say that the national supervisory body could treat the rules 'creatively'. In saying this he expressed, indirectly, of the Netherlands' supervisors, which could have done rather more to monitor Ice Save. Instead, however, they went straight to the top of the EU class by implementing Brussels' rules in an extremely precise fashion.

At the WTO Lamy admitted in answer to one of my questions that it would indeed be difficulty for developing countries to exercise effective control over banks, as they simply lack the expertise to do this. He was therefore not insensitive to my argument that we should be more cautious in having these countries throw open their financial markets.

So, just two examples of utterances that you won't find in the press, one reason why this sort of work visit is useful. Moreover, it's always handy to be able to phone Basel or Geneva if you need information.

The best meeting, however, came after the official part of the visit was over, when I got together with the Swiss trade unions in a café in the centre of Geneva, emblazoned with posters from the city's lively alternative scene. The café was full of people who give their time and energy to the struggle for a better world. It's difficult in Switzerland for the trade union movement to hold the line and not go along with the marketisation of society, but they certainly do their best. There is a great demand for new ideas about the economy. We readily agreed that the current crisis demonstrates that not only banks but all sorts of corporations can grow too big. If they fall, this costs the state so much that years of spending cuts are needed to recuperate the money. Corporations continue to grow, managers carry on raking in bonus after bonus, and the taxpayer pays the bill. This is what they – Basel's bankers and Geneva's trade people – now call ‘too big to fail’. This presents us with the challenge of doing something with this idea: how can we prevent corporations and banks from growing too large? As far as I am concerned this is 'to be continued', not only at the European level but in the Netherlands, too.

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