Europe November 30, 2009, 2:01PM EST

EU to Give U.S. Bank Transaction Data

Under enormous pressure from American diplomats citing terrorism fears, Europe has reluctantly agreed to let covert monitoring of wire transfers continue

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The pressure from the Americans was "massive," say diplomats in Brussels. U.S. Secretary of State Hillary Clinton apparently told her European counterparts that the fate of the West hung in the balance. And in the capital cities of Europe, American ambassadors stormed governments like door-to-door salespeople. As one EU foreign minister put it, "they pulled out all the moral and political stops."

Because what the Americans were selling was controversial indeed. Early this week, the European Parliament's Justice and Home Affairs Council will meet and decide upon a draft agreement between the EU and U.S., the so-called "SWIFT agreement." This agreement allows the U.S. ongoing access to European banking data for the purposes of anti-terrorism investigations.

And, the Americans said, if Washington's security services were now refused access to the financial transactions of European citizens, then an essential element of the war on terror would be missing. Security levels would drop, the threat of new terrorist attacks would rise—including in Europe. And who would want to be responsible for that?

European Union Accedes To American Wishes

Nobody, of course. Which is why, after some pressure, the governments of the European Union's 27 member states eventually bowed to Washington's wishes. The governments who held out the longest were those in Germany and Austria. But last week, Berlin's new coalition government also came around. Interior Minister Thomas de Maizière informed his colleague Justice Minister Sabine Leutheusser-Schnarrenberg, who belongs to the liberal Free Democratic Party (FDP), that he would not block the American proposal in Brussels. There would not be a German "no," however. Instead, he would simply abstain from the vote.

For the FDP, the issue had been a potential coalition-breaker up until relatively recently—but now the FDP contingent in the German cabinet took it all in their stride. Left out in the cold by Berlin, the politicians in Vienna lost their nerve too and also gave in.

Hence on Monday, the EU's interior ministers look highly likely to implement an agreement with Washington that has been politically divisive and which is of dubious legality. The whole process is being hurried along. On Dec. 1 the Lisbon Treaty comes into effect—which would mean that the European Parliament would also get a say in the matter. And in this particular case, that is not considered desirable. The majority of the EU parliamentarians are opposed to the exchange of private banking data and could try to block the agreement.

Some members of the European Parliament are so indignant about the whole affair that they have accused foreign ministers of tricking and ignoring them. "We did not concertedly fight for so many years for a new era of cooperation in European domestic policies just to be hoodwinked in the final stages," said Alexander Alvaro, a spokesperson on domestic issues for the FDP in Europe and speaker for European interior affairs in Brussels. And on Thursday Jerzy Buzek, the Polish president of the European Parliament, wrote an urgent letter to the relevant EU ministers asking them, at the very least, to postpone the meeting. But there is not much hope of that.

Americans Had Access to EU Banking Data For Years Already

In the spring of 2006, an outraged Europe discovered that the American intelligence services, including the CIA and other agencies, had been accessing European banking data illegally via the Society for Worldwide Interbank Financial Telecommunication. The society, SWIFT for short, is a cooperative organization comprising over 8,000 financial institutions working in over 200 countries. But it is not a bank and holds no funds. What it does is operate a network of international financial messages. SWIFT computers register millions of these every day, worth, on average, around €5 trillion per day.