More than six years after the global financial crisis broke out, European Union (EU) countries continue to protect banks and investments funds from tougher rules, despite abundant evidence of recurrent criminal or reckless activities in the sector, and new accumulation of enormous financial risks.

The latest in a string of scandals involving banks was the revelation in May that at least seven European banks or banks operating in Europe had colluded to falsely fix the Euro Interbank Offered Rate (Euribor).

The Euribor is a daily reference rate, published by the European Banking Federation, based on the averaged interest rates at which Eurozone banks offer to lend unsecured funds to other banks in the euro wholesale money market.

“The (European) commission has concerns that … three banks may have taken part in a collusive scheme which aimed at distorting the normal course of pricing components for euro interest rate derivatives,” the body said in a statement issued May 22.

The three banks in question are JPMorgan Chase, HSBC and Crédit Agricole. Another four banks (Barclays, Deutsche Bank, Royal Bank of Scotland and Société Générale), also accused of misconduct concerning the Euribor, reached a settlement with European regulators.“Another typical example of the lack of will among European governments to improve regulations and reduce risks in financial markets is the long and so far fruitless debate on the introduction of a very low tax on financial transactions, also known as the Tobin tax”

Because of such behaviour, bank managers have since 2009 again earned the nickname of ‘banksters’, a combination of banker and gangster coined in 1937 at the height of the global economic crisis of the time.

Experts and analysts complaint that despite such criminal activities, and the new accumulation of financial risks, European governments have during the past six years repeatedly intervened to stop far-reaching rules to regulate operations in the financial sector.

The list of actions taken by European governments to spare banks and investment funds from new rules is long. In December last year, the French government managed to arrange for French banks to pay a lower-than European average contribution to the E.U.-created national deposit insurance.

“To obtain that, France used the friendly support of Michel Barnier, the French European Commissioner for Internal Market and Services,” says Burkhard Balz, German member of the European Parliament (EP).  Balz is a member of the conservative Christian Democratic Union.

“Over the last six years we have seen a pattern of behaviour concerning efforts to introduce a Europe-wide financial regulation,” Udo Bullmann, a German Social Democratic member of the European Parliament, told IPS.

This pattern goes as follows, Bullmann added: “First, the European Commission makes a timid regulating proposal. The European Parliament takes the proposal over and toughens its content. But then it is the turn of governments, and they water the proposal down, even under the original commission level.”

Independent experts agree. “The European Union is indeed a community of states, but at the end of the day, the member states compete against each other instead of cooperating to put forward a comprehensive set of rules for financial markets,” says Joost Mulder of Finance Watch, an independent association set up in 2011 to act as a public interest counterweight to the powerful financial lobby.

“What the individual states want is to protect their countries’ banks and investment funds,” Mulder added.

Opposition to far-reaching financial regulation comes from practically every state, but in changing roles. Britain usually opposes rules that would affect operations at the London financial market. It also has consistently opposed establishing limits for bonuses for financial managers, one of the main reasons for risky investments and moral hazard. Germany and France prefer to pass modest laws on financial aspects, to avoid approving a tougher European binding regulation.

In September last year, Finance Watch published a report on the planned European banking union and the bank reform in the European Union, and concluded that “despite its intention, (it) will fail to prevent European citizens from bearing the losses of failed banks in the event of a systemic banking crisis unless there are meaningful structural and capital reforms to Europe’s largest banks.”

The banking union, which should start operations in November, is supposed to create a safety net to minimise the risk of further European Union taxpayer-funded bailouts.

The banking unions foresees a new European authority, the so-called Single Resolution Mechanism (SRM), with the power to wind up or restructure failing banks.

According to Finance Watch, “The SRM has the right objectives: namely to enable the orderly resolution of banks in participating member states, and to weaken the interdependencies between financial institutions and their sovereigns.”

But the watchdog group does not see “how these objectives can be met without reducing the regulatory incentives that favour sovereign debt, and without a structural reform of bank activities to make bail-in and bank resolution credible.”

According to International Monetary Fund (IMF) figures, in the aftermath of the global financial meltdown of 2008, industrialised countries bailed out private banks for 1.75 trillion dollars, some 1.3 trillion euros. This amounts to the one-year salary of more than 42 million people earning net average German wages of around 25,000 euro per year.

The global bank rescue weakened the European states involved, in particular Greece, Spain, Portugal and Ireland, and triggered, among others, the present sovereign debt crisis, with its social and human costs.

Another typical example of the lack of will among European governments to improve regulations and reduce risks in financial markets is the long and so far fruitless debate on the introduction of a very low tax on financial transactions, also known as the Tobin tax, after it was suggested by Nobel Laureate economist James Tobin in 1972.

In September 2011, the European Commission proposed the introduction of the tax within the 27 member states of the European Union by 2014. According to the original proposal, the tax would only impact financial transactions between financial institutions charging 0.1 percent against the exchange of shares and bonds and 0.01 percent across derivative contracts.

According to the initial Commission estimates, the tax could raise up to 57 billion euros per year. But, as of June 2014, that is, almost three years after the proposal, only 11 E.U. member countries appear ready to introduce the tax. Furthermore, there is wide disagreement among these 11 countries about which transactions should be taxed, and how high the levy should be.

Sven Giegold, German Green Party member of the Euro-Parliament and expert on international finance, even goes as far as saying that “France, nominally a strong supporter of the Tobin tax, actually did kill it.”

In May, during negotiations at the European Council, the French government opposed raising the Tobin tax on most financial derivatives and on government bonds. Giegold said that “France obviously fears that if taxed, banks wouldn’t buy government bonds.”

After such objections, Giegold complained, “the original tax on financial transactions has been devaluated to a useless levy to be paid only by small savers.”

A new scheme to avoid new rules for financial markets in Europe is to make them part of supra-regional binding projects, such as the Transatlantic Trade and Investment Partnership (TTIP), currently under negotiation between the European Union and the U.S. government.

According to Finance Watch, “there is no proven case for including financial services in the TTIP.” “We are concerned that the EU’s approach to regulatory cooperation (within the TTIP negotiations related to financial markets) will encourage convergence around the lowest common standards, not the highest,” Thierry Philipponnat, Finance Watch’s secretary, said during a recent hearing at the European Parliament.

For Philipponnat, “it is difficult to see how the inclusion of financial services in the European Union-U.S. free trade agreement negotiations, and especially the parts on regulatory cooperation, will not lead to a ‘race to the bottom’ in financial services regulation.”

For many months, the Transatlantic Trade and Investment Partnership (TTIP) debates between the European Commission (EC) and the U.S. government were a matter for insiders.

In July 2013, government officials and representatives of international corporations agreed behind closed doors that such a free trade agreement (FTA) would be a great step forward towards homogenising social, environmental, health, industrial, and labour standards across the Atlantic Ocean.

Until recently, only a handful of civil society organisations, mostly based in Brussels, questioned the wisdom of such an agreement, and revealed the secret dealings of governments, in particular those referring to the so-called ‘investor protection clauses’ and the downgrading of social and environmental standards in Europe, to the detriment of European consumers and parliaments.

But, under pressure from civil society groups, the EC agreed earlier this year to launch a process of public consultation on the TTIP. And, since early May, after demonstrations by numerous consumer, environmental protection and labour groups, the TTIP has become a theme debated across society, and criticism of the way the EC and the U.S. government, in close cooperation with corporate lobbyist groups, have managed the secret negotiations is now general.Criticism of the way the EC and the U.S. government, in close cooperation with corporate lobbyist groups, have managed the secret negotiations is now general

By early May, some 500,000 people in Germany alone had signed a petition against the TTIP, complaining that the agreement would “undermine democracy and the rule of law… endanger our health… and (would be) practically irreversible.”

Even sectors of governments have become outspoken critics of the TTIP. During a conference on the TTIP held in Berlin on May 20, the German Minister of State for Culture and Media, Monika Gruetters, said: “We Europeans have plenty to lose,”  if the FTA with the United States were to forbid state subsidies for theatre, music, public radio, and cinema production.

Gruetters even used a slogan typical of anti-globalisation activists, by saying that “culture is not a commodity.” That’s why, Gruetters explained, European states subsidise cultural production, “to permit arts to be critical, complex, (and) heterogeneous.”

However, she said, for the U.S. government such subsidies are “protectionist measures.” To confirm this view, Gruetters quoted a “recent conversation” she had with the U.S. ambassador to Berlin, John B. Emerson.

“State privileges for cultural production belong to the European self-conception,” Gruetters insisted. “We oppose a new deregulation of culture (as demanded by the TTIP) because we are afraid we would lose our unique cultural landscape.”

German Minister for Economic Affairs and Energy, Sigmar Gabriel, has also adopted the critical position of civil society groups against the investor protection clause that makes up the bulk of the TTIP. According to this clause, transnational corporations would be allowed to challenge national labour, health, environmental and other standards before non-governmental tribunals.

The deliberations of such tribunals are secret and their verdicts are definitive and cannot be appealed against.

Pia Eberhardt, expert for trade and investment at the Corporate Europe Observatory (CEO), says that transnational companies around the world “are using such clauses contained in practically all FTAs to claim compensations for perfectly legitimate government policies to protect health, the environment and other public interests – because they claim these policies have the indirect effect of undermining corporate profits.”

The Brussels-based CEO, an anti-lobbying watchdog organisation, is one of the leading civil society groups questioning the TTIP. It has forced the European Commission to reveal secret protocols of the deliberations between European and U.S. government officials, and has also shown that the EC most of the time adopts the positions presented by industrial lobbyists as its own.

A typical example of such corporate actions against states is the ongoing lawsuit that U.S. tobacco company Philip Morris, based in Switzerland, launched in 2010 against Uruguay. Philip Morris is demanding two billion dollars as compensation for alleged economic losses from Uruguay, claiming that the South-American country’s anti-smoking legislation devalues its cigarette trademarks and investments.

In a similar case, the oil and gas company Lone Pine Resources is suing the Canadian government for 250 million dollars for, as the company’s lawsuit puts it, the “arbitrary, capricious and illegal revocation of (Oil Pine Resources’) valuable right to mine for oil and gas under the Saint Lawrence River.”

In 2012, Quebec’s regional government suspended fracking, the controversial method to exploit shale gas fields. According to Lone Pine Resources, the measure violates Chapter Eleven of the North American FTA.

For civil society groups in Canada, such a lawsuit is “outrageous”.

“Based on the principle of precaution, Quebec government’s response to the concerns of its population is appropriate and legitimate,” said Martine Châtelain, president of Eau Secours!, the Quebec-based coalition for a responsible management of water. “No companies should be allowed to sue a State when it implements sovereign measures to protect water and the common goods for the sake of our ecosystems and the health of our peoples.”

For Maritta Strasser, leading activist behind the German petition against the TTIP, the investor protection clauses are “a tool to blackmail legitimate governments and parliaments.”

Strasser’s fears are well founded. As a former Canadian government official has been quoted as saying, “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”

For Eberhardt of CEO, the law suits against governments prove that FTAs “create two different systems of justice. One, full of privileges for corporations, and another one for the rest of the society.”

Many consumer groups are also concerned that the TTIP would facilitate the import of U.S. food stuffs, that otherwise would not satisfy present European health standards, into the European Union, such as genetically modified agricultural products, or hormone- or chemically-treated meat and poultry.

By now, even for German Economic Affairs Minister Sigmar Gabriel, “it is unconceivable that an investor protection clause would annul German or European laws.” Gabriel also opposes non-governmental tribunals ruling over conflicts between governments and corporations.

“Both the United States and Europe are democratic state structures that guarantee the rule of law,” Gabriel said. There is no reason, then, “to allow special jurisdiction tribunals to rule over our laws and over our social, environmental and health standards.”

He also demands that from now on the negotiations between the EU and the U.S. government be “carried out in the most transparent way,” adding that “if the European Commission believes that it can leave the national parliaments out of the negotiations, than the TTIP will be a sound failure.”

This has not, however, dented European Trade Commissioner Karel de Gucht’s interpretation of the negotiations. “The U.S. government demands that the TTIP negations remain confidential and that the agreement contains an investor protection clause,” he told the German ZDF public television channel.

The result is that most of the protocols of the negotiations continued to be classified, as demanded by the U.S. government, and only private corporations and a restricted number of European government officials and members of the European Parliament have access to the documents.