No sane Mexican would want to live in the US. Eduardo Villanueva Mansilla

The End of Lobbying

The German export lobby, the British finance lobby and the French energy lobby hinder problem solving in the EU. The continent has only one chance: the subordination of these interests.

Three major structural problems are affecting Europe: The polarization of regional competitiveness, the inability to push towards a restructuring of the finance industry and the reluctance to promote energy transition. The German export industry, the British financial sector and French energy companies are jeopardizing suitable reform projects. European solutions are needed to offer alternatives to these national interests.

The current economic misery is a political disaster because it is the result of a bad reaction to the crisis. It is therefore self-inflicted. Particularly delicate is the fact that the downturn could quite easily be answered with a Europe-wide public investment wave. Besides these cyclical problems, Europe is facing some profound structural challenges that cannot be managed with a stimulus package but that require the reorganization of entire sectors. Such solutions would oppose the alleged national interests of Europe’s biggest member states. The most powerful European lobbies, that is to say, the German export lobby, the British financial lobby and the French energy lobby, will cause the needed resolutions to fail.

The German export lobby

Instead of focusing on the entire Union’s long-term prosperity, Germany is devoted to securing short-term national success from foreign trade. Due to regional competitiveness, intensively promoted by Germany, its economy grows more slowly than, for example, the economy of the United States. In comparison to the general stagnation of the EU, to which Germany has contributed substantially, Germany remains quite successful economically speaking. However, the nation’s wage level does not reflect its high productivity. Germany’s trade partners are suffering from this gap in two ways: First, because German demand is disproportionately low, and second, because German products are too cheap in relation to their quality. It is therefore unsurprising that Germany has managed to accumulate a trade surplus almost every year since 1993.

Whatever one may criticize about Germany, its abundance in human as well as physical capital is not only real but underrated. A return to the German mark would probably result in a revaluation of at least 20 percent against the U.S. dollar – also a good benchmark for showing how much lower the wages are in Germany. The strength of the industry within the Germany economy (15 of the 30 biggest companies are manufacturers) is responsible for a relatively influential export lobby which has already become part of the national identity. This export lobby tries its best to delay the overall devaluation of German goods’ prices.

The British finance lobby

The United Kingdom is doing all it can to save an economic model that is built on sand. After a drastic deindustrialization following the Thatcher years, Great Britain acquired the status of being the bank of the world. Its wealth only exists on paper and has little to do with the country’s real human and physical capital. Only 10 of the 30 biggest British companies are industrial manufacturers, but all of them are financial giants. Great Britain has been holding a trade deficit since 1998 (they import more than they export), which indicates that the country systematically consumes more than it is able to produce. Still, it is fighting off all limitations to the financial sector, just because the City of London – the unquestioned political epicenter of power – is unwilling to question the country’s unsustainable economic model. Prime Minister Cameron stated two years ago that he would not support a financial transaction tax.

The French energy lobby

A relatively small number of innovative small- to medium-size companies and the dominance of a few big businesses are often seen as the core structural problems of France’s economy. Amongst the latter, energy companies figure particularly prominently: Four of the 30 biggest European companies are energy enterprises, three of them in the French top 10. Since they are all specialized in nuclear energy, they deliver 75 percent of all the nuclear power that Europe is using. Électricité de France, the second biggest electricity generator in the world, is de facto state owned. Furthermore, France commands an industrial plant manufacturing site that is directly linked to a nuclear power generator. Areva, one of France’s top 50 companies, specializes in manufacturing civil and military atomic reactors and is state owned as well. The country itself hence becomes the lobby for its biggest industry. France embodies the biggest obstacle to a European energy revolution and a farewell to nuclear energy.

Economic consensus for Europe

An economic regime change would probably be most painful for Great Britain. New industries would have to be built overnight, an enormous effort which has been overdue ever since the 1980s. For France, a nation that has not been focusing on renewable energy so far, the adjustment would likewise be of a substantial degree. It would require a complete realignment. Germany, on the other hand, would probably have to show the smallest effort to adjust itself. Its primary task would be to accept that an export (vice-)champion should also be an import (vice-)champion. All it would have to do is spend the wealth that it is generating in real terms.

Small disadvantages regarding price competitiveness – something that is of little relevance to Germany’s export success – would be more than compensated by strong impulses on domestic demand. The industry’s share of the GDP would probably decrease a little in favor of the service industries. Instead of focusing on the demand of emerging countries, the German economic structure would focus more on its own national demand.

Unfortunately, all three lobbies have managed to establish their respective economic sectors as national shrines in the public awareness of their countries – protected through politics and conjured as myths. This leaves the three main structural economic questions of our time unanswered. It seems that the only chance is the development of a European authority that is strong enough to subordinate these national interests.

Translated from German


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