The European business lobby. (business influence on European Union policy)

Lobbying is a familiar if not always welcome reality in politics and many now recognise that companies have a legitimate role to play in the public policy process. But how firms set about exerting influence - and what works best - is still something of a mystery. In particular, few empirical studies have examined how firms have tackled the fast-changing Brussels maze. Based on interviews and a survey, this article outlines how firms have come to play a prominent role in the European Union's policy process and how their approach to influencing EU policy has developed. It then analyzes which methods they think are most effective - and most cost-effective. The author concludes by assessing the extent to which building strategic alliances with rival firms and public interest groups facilitates their own direct lobbying at the European Commission forums, and vice-versa.

Business lobbying is omnipresent in most modern economies. However, the unobtrusive nature of much of this activity restricts our understanding of business behaviour and influence. Most studies of business representation have tended to focus on visible lobbying by declining industries or overt specialised political action by interest associations. Such approaches neglect the political reality of generalised direct lobbying by business and fail to recognise the increasing professionalism of "political affairs" executives. What is more, recent studies have attempted to explain political action of big business at the European level in terms of existing national public policy systems: they have often failed to capture the institutional intricacies of the European supranational political system.

The gradual transfer of regulatory functions to European Union (EU) institutions and the establishment of the single market have all contributed to the Europeanisation of business politics. Yet few could have envisaged the rapid development of the firms' political finesse or the important role they would play in the formation of European institutions and the integration process. Firms have already had a big impact on the European public policy process, both as individual lobbyists and as mediators between the EU institutions and member states. Yet there is only a rudimentary understanding of how they use different political channels in the EU, the relative cost of this action and its effectiveness.

This article tries to describe and analyze how firms lobby in the EU: how their behaviour has developed, how they behave now and the indicators we can draw from this for the future. The analysis is rooted in a survey, completed in March 1994, of political representation by Europe's top 200 firms. Between 1993 and 1997, interviews were conducted with officials at the European Commission (the Commission), the European Parliament (EP) and European industry-based Federations. These interviews provided the qualitative background to the analysis of the evolution of the public policy relationship between the firm and the EU. Assessment of the firms' allocation of political resources and their lobbying efficiency is based on a series of interviews with 50 directors responsible for "government" and/or "European affairs" and 94 survey replies. Using this empirical evidence, the article pursues the idea that European multinationals have developed sophisticated political affairs "functions" that are capable of resulting in strategic decisions. The concluding section of the article includes a discussion of how political "games" have affected the development of EU political channels, EU institutions and the EU integration process.

The Changing Business Lobby in Europe

Establishment of the European lobby

During the 1970s and early 1980s the Commission made numerous attempts to foster a form of European corporatism. The reasoning behind this was a desire to create a European identity and "interest elite" that would work in parallel with the member states. However, despite recognition of the value of a structured system of consultation, the reality was a less formalised and pluralist policy-making system (Streeck and Schmitter 1991). In this formative period, the national perspective dominated business, not least because of the veto powers of individual countries in the Council of Ministers. At this stage, firms had little incentive to alter their traditional lobbying methods within their own countries: they could normally rely on unfavourable European policy being blocked by well-briefed national ministers. The national focus was reinforced by the recognition that national lobbying strategies avoided compromises at the European level and ensured the "lowest common denominator" style of policy making by the Commission (Grant 1993). However, while this approach represented a low-cost lobbying option for individual firms, its reactive and often destructive nature meant that business contributed little to the European …