Lawmakers can be pesky obstacles for even the most democratic leaders, as the European Parliament proved earlier this month. Defying the combined pressure of the Obama Administration and top European leaders, Parliament members torpedoed a proposal that would have given the U.S. access to Europeans' banking details seen by the U.S. as a vital counter-terrorism tool on the grounds that it invaded people's privacy.
The vote has sparked the usual questions about whether there is a fundamental cultural divide between the U.S. and Europe over balancing security concerns with civil liberties. But the real significance may be simply institutional: the European Parliament, freshly endowed with new lawmaking powers following the passage of the Lisbon Treaty last year, is flexing its muscles as an emerging player in European politics. Suddenly, the legislative body has a semblance of real power something it never really had before.
That Parliament members chose to take a stand on the bank data issue is a little surprising. The Terrorist Finance Tracking Program (TFTP) has always been a controversial initiative. It was secretly set up after the Sept. 11 attacks, allowing CIA agents and U.S. Treasury officials to sift through the European financial messaging data collected by SWIFT, an international bank transfer consortium based in Belgium. When the arrangement came to light in 2006, it outraged civil liberties advocates and prompted the European Union to outline certain conditions under which the U.S. could access the information the precursor to the arrangement just struck down by the Parliament.
Until recently, SWIFT had its data servers on U.S. soil, giving American authorities the jurisdiction they needed to access them. But at the end last year, the servers covering European wire transfers were moved to Switzerland and the Netherlands, forcing the U.S. to seek European consent to continue sifting through SWIFT's database of some 8,000 banks. The U.S. says the information, which includes customer names, account numbers and amounts transferred, is needed to root out the various terrorist organizations that move funds around the world. In 2003, officials say the program helped Thai authorities capture Riduan Isamuddin, also known by the name Hambali, who was the suspected leader of the al-Qaeda terror network in Southeast Asia.
European governments said the bank data legislation, while not perfect, at least required U.S. authorities to abide by several European demands on data protection and improved oversight. Yet despite their pressure and last-minute pleas by such high-ranking U.S. officials as Vice President Joe Biden, Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner the European Parliament voted down the measure on Feb. 11 by a hefty margin of 378-196. After the vote, the Obama Administration called it "a setback for U.S.-E.U. counter-terror cooperation."
Legislators who voted against the pact, however, said it was a victory for civil liberties. "Nobody is challenging the need for finance tracking to fight terrorism," says Reinhard Bütikofer, the leader of the German Parliament members from the Green Party. "But we challenge the idea this can only be done without privacy guarantees. We devalue democracy when we compromise on fundamental rights."
But the democratic system that allowed the Parliament to have a say on the issue is only two months old. Under the E.U.'s Lisbon Treaty, which came into force in December, Parliament members now decide jointly with European governments on legal affairs. And by blocking the SWIFT agreement, they proved that they were not shy about exercising their new powers. Dutch lawmaker Jeanine Hennis-Plasschaert, who led the Parliament's attack on the deal, said if the Obama Administration had proposed such a data-sharing arrangement in the U.S., "we all know what the U.S. Congress would say, don't we?" German lawmaker Martin Schulz was even more vocal, saying the U.S. "wrongly thought it could deal with the European Parliament like Gulliver with the Lilliputians."
Nonetheless, the move enraged other European lawmakers, who said the Parliament was merely pontificating. "The European Parliament has thrown its toys out of the pram and put a crucial counter-terrorism data-sharing agreement with the U.S.A. into jeopardy," said Timothy Kirkhope, a lawmaker from the British Conservative Party. "It is not fair that the U.S.'s efforts to tackle terrorist financing have become embroiled in an argument between E.U. institutions." European and U.S. officials will almost certainly need to craft a different kind of pact now. While Washington could cut individual deals with the banking centers of Belgium, the Netherlands and Switzerland to gain access to their data, officials say a better tactic may be to try an assuage European Parliament concerns over data-protection standards and put the proposal before the body for another vote.
Perhaps the biggest message from the vote is that European governments will now have to adapt to working with an increasingly emboldened Parliament. Thomas Klau, who heads the Paris office of the European Council on Foreign Relations (ECFR), says that while Parliament members were sincere in their concerns over civil liberties, some were perhaps also a little over-excited to exercise their new authority. "The institutional landscape has changed," he says. "This is an early affirmation of the European Parliament's increased powers and self-confidence in the wake of the Lisbon Treaty. And it now has political ambition and the guts to exercise it."