By Máté Hajba, a Hungarian commentator. He is the Director of the Free Market Foundation, a Hungarian libertarian think tank.
The European Union is right to speak out against the misallocation of taxpayers’ money. It should also practise what it preaches, and increase the transparency of its own spending.
As a Hungarian, I am all too familiar with organisations that claim to be non-governmental while serving the interests of a government rather than those of citizens. This is done in order to obtain ever more taxpayers’ money from the state, and to do what decision-makers want rather than what people need. The civic organisation I run in Hungary, the Free Market Foundation, has often been the target of propaganda attacks under the illiberal Orbán regime, paid for with public money. Using taxpayers’ money to serve the interests of the state rather than those of taxpayers is wrong. It undermines trust in the civic sector and in government alike. The practice is not unique to Hungary. At EU level it is common enough that we call it circular lobbying.
A paper by the Free Market Foundation has identified approximately €12.8 million in annual public funding flowing to nine organisations engaged in EU policy advocacy. NGOs that lobby public institutions in the EU receive large grants from EU bodies. This rightly raises the question of how non-governmental they really are. There is nothing wrong with EU funding, or with lobbying, in itself. There should be competition between environmentalists, pro-business groups and trade unions, to name only a few. Lobbying should work like a marketplace of ideas, so that decision-makers can hear different points of view and different interests. When a public body gives considerable sums to a particular group, however, it tilts the playing field. Public bodies can then pursue the agenda that serves their own interests, while claiming it has been legitimised by the civic sector.
Of course, the fact that lobbyists receive money from the institutions they lobby does not necessarily mean that they serve only the interests of those who fund them. It does cast doubt on their operations nonetheless. It also raises questions about whom the EU funds, and whether NGOs holding certain views receive preferential treatment. The Commission, for instance, has pushed for flavour bans for years, and so have the very organisations it funds. In effect, the institutions are lobbying themselves, and creating the illusion of public support.
EU funds have been fueling cronyism, so it is best to cut EU spending for all member states. Cutting funds selectively is diplomatic science-fiction https://t.co/vPFeNg8XTM #eubudget #mff https://t.co/IwkGPRQSyw
— Pieter Cleppe (@pietercleppe) September 15, 2024
The European Union needs greater transparency about the practice of circular lobbying, or it will erode trust in EU institutions and in NGOs alike. At a time when uncertainty in global affairs is creating a demand for security, the EU could stand out as the level-headed, trustworthy power. The EU may be a little boring, but that is also a strength in these times of turmoil: it does not deviate much from the values it represents, or at least from those it claims to represent. It must not squander this opportunity by applying double standards to public funds and to lobbying, and by giving preferential treatment to certain NGOs over others.
The EU is well aware of this problem. The European Court of Auditors claims that the EU is funding NGOs without proper oversight of how public funds are used, which hinders transparency. MEPs of the European People’s Party have accused the Commission of funding NGOs to lobby for the European Green Deal. Instead of striving for greater transparency, the Commission has started coaching NGOs on how to avoid any mention of lobbying and advocacy in grant applications.
The improvement in transparency needs to happen quickly. The EU recognises the problem, but more must be done immediately to address it. In the longer term, NGOs should focus on diversifying their funding sources, so that they rely more on members and private donors than on EU taxpayers, and can truly represent the public.
Circular lobbying undermines the trustworthiness of both the EU and non-governmental organisations. If the EU is to condemn corruption in the member states credibly, it should increase the transparency of its own funding practices.
Originally published by Young Voices Europe
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