As we go to the polls to select our next set of representatives on May 23rd, we need them to be bold and ambitious and to serve the interests of people and planet.
But there’s something in the way. Right now, an army of lobbyists are working relentlessly to get finance rules written in banks’ favour, rather than citizens.
We want our future Members of the European Parliament (MEPs) to know that this community is looking for real leadership when we head to the ballot box.
That’s exactly why you and hundreds of people across the EU are taking action to deliver our message to MEP candidates across Europe, with a demand that they stand up to the banks and the growing influence of the financial lobby.
Let’s make sure that your candidates understand the urgency to #ChangeFinance. Send a letter asking them to take action.
Over 1.700 lobbyists work for the financial sector in Brussels, and they have a clear focus: to increase their profits and prevent laws that challenge them. For example, in March this year, they lobbied hard against rules that would make financing fossil fuels more expensive.
Financial lobbyists persuade politicians to vote for weak laws that give them permission to speculate, including on companies, housing, food and public services. This results in workers earning less, consumers paying more and rich people getting higher returns, leading to growing inequality. Many attempts to secure sustainable models for society are undercut by the financial sector.
What’s more, the risks it takes could lead to another monumental financial crisis. Experts warn that such a crisis will be worse than the collapse of 2008, which cost billions of euros in taxpayers’ money to bail out banks. People lost their jobs and homes, and many countries were immersed in austerity policies.
If we roll back the power of the financial lobby and prevent it from dominating decision-making spaces, such as the European Parliament, we can build a healthy and democratic future for Europe and its citizens.
In Brussels, powerful financial companies are able to put their interests first on the agenda. The lobbyists that represent big banks and investment funds use all kinds of arguments to persuade decision-makers that there is no need for measures to change the financial system, whose primary function is their benefit. In 2018, only 31% of EU bank assets were lent to households and non-financial companies, while almost 70% were devoted to speculative activities.
Vast lobby budgets have allowed the financial sector to deeply penetrate each of the EU institutions and prevent strict financial reforms. It has been very difficult for the voice of civil society to be heard and the public interest given priority. Given this imbalance, the financial lobby needs to be kept at bay to protect the integrity of democratic decision-making.
Changing the financial system is about changing the way money is handled and who gets the best financial services. Most of this is decided in EU institutions, of which the European Parliament plays an important role.
To set society on the course towards equality and sustainability, we urge the next set of parliamentarians to create another playing field: one that will prevent those with big money from dominating big politics, and one that will secure other voices in the debate.
In the new parliamentary session, we need parliamentarians to take ambitious measures to roll back the power and overwhelming influence of the financial lobby, which prevents the interests of many European citizens being served.
The crash of 2008 led to a public outcry against an out-of-control financial system. Millions of European citizens lost their jobs, with many losing their homes. At the same time, big banks were bailed out with hundreds of millions of euros of taxpayer money. The resulting eurocrisis led directly to cuts in public services and welfare in EU countries. People demanded far-reaching reforms to prevent such a disaster ever happening again.
Since then, the financial lobby has fought tooth and nail to prevent fundamental change. It defends the interests of the big banks, investment funds and insurance companies, and it does not see a problem with a financial system tailored entirely to make quick profits. Using all available inroads to power, they have managed to prevent effective reform.
As a result of the lengthy campaign conducted by well-connected, well-funded lobbyists, what we see in the EU is a financial system fraught with the same injustices and dangers as in 2008. We are sleepwalking into the next crash.
The biggest banks are still so big they are bound to be bailed out with public money, should they fail. For that reason, a European fund (ESM) is now capable of lending 500 billion euros under the Banking Union to bailout banks. Even the kind of speculative financial products that were blamed for igniting the crisis in 2008 have been allowed to reappear under the Capital Markets Union.
There is still a long way to go before we have reached the goal of financial markets at the service of society – a financial system that can secure and strengthen welfare, sustainability and social justice. The key lesson from the past decade is that for us to succeed with those objectives, we need to roll back the power of the financial lobby.
Climate change will dramatically alter our economies, new activities will rise, old sectors will die. The financial sector is not ready for such drastic changes. Researchers put their potential losses in the tens of trillions. For our over-indebted, over-connected, fragile financial system the scale of such losses will prove catastrophic. Once again governments will be called on to bail them out.
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