Corruption across EU ‘breathtaking’ – EU Commission

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UE coruptie bani steagThe extent of corruption in Europe is „breathtaking” and it costs the EU economy at least 120 bn euros (£99 bn) annually, the European Commission says.

EU Home Affairs Commissioner Cecilia Malmstroem has presented a full report on the problem in february 2014.

She said the true cost of corruption was „probably much higher” than 120 bn.

Three-quarters of Europeans surveyed for the Commission study said that corruption was widespread, and more than half said the level had increased.

„The extent of the problem in Europe is breathtaking, although Sweden is among the countries with the least problems”, Ms Malmstroem wrote in Sweden’s Goeteborgs – Posten daily.

The cost to the EU economy is equivalent to the bloc’s annual budget.

For the report the Commission studied corruption in all 28 EU member states. The Commission says it is the first time it has done such a survey.

Bribery widespread

National governments, rather than EU institutions, are chiefly responsible for fighting corruption in the EU.

But Ms Malmstroem said national governments and the European Parliament had asked the Commission to carry out the EU-wide study. The Commission drafts EU laws and enforces compliance with EU treaties.

In the UK only five people out of 1,115 – less than 1% – said they had been expected to pay a bribe. It was „the best result in all Europe”, the report said.

But 64% of British respondents said they believed corruption to be widespread in the UK, while the EU average was 74% on that question.

In some countries there was a relatively high number reporting personal experience of bribery.

„Answers confirm a positive perception and low experience of bribery in the case of Denmark, Finland, Luxembourg and Sweden. Respondents in these countries rarely indicated that they had been expected to pay a bribe (less than 1% of cases) and the number of people who think that corruption is widespread (20%, 29%, 42% and 44% respectively) is significantly below the EU average. In the case of the UK, only 5 persons out of 1115 were expected to pay a bribe (less than 1%), showing the best result in all Europe; nevertheless, the perception data show that 64% of UK respondents think corruption is widespread in the country (the EU average is 74%). In countries like Germany, the Netherlands, Belgium, Estonia and France, while more than half of the respondents think corruption is a widespread phenomenon, the actual number of people having had to pay a bribe is low (around 2%). These countries also appear among the good performers on the Transparency International Index. Austria shares similar features with this group with the exception of a somewhat high number of respondents (5%) who reported to have been expected to pay a bribe. In some countries a relatively high number of people indicated that they had personal experience with bribery, but with a clear concentration on a limited number of sectors, including Hungary (13%), Slovakia (14%) and Poland (15%). In these countries, one sector, namely healthcare, provides the bulk of instances of bribery”.

„The political commitment to really root out corruption seems to be missing” – Cecilia Malmstroem, EU Home Affairs Commissioner

In Croatia, the Czech Republic, Lithuania, Bulgaria, Romania and Greece, between 6% and 29% of respondents said they had been asked for a bribe, or had been expected to pay one, in the past 12 months.

There were also high levels of bribery in Poland (15%), Slovakia (14%) and Hungary (13%), where the most prevalent instances were in healthcare.

Ms Malmstroem said corruption was eroding trust in democracy and draining resources from the legal economy.

The EU has an anti-fraud agency, Olaf, which focuses on fraud and corruption affecting the EU budget, but it has limited resources. In 2011 its budget was just 23.5m euros.

The Commission highlighted that:

Public procurement (public bodies buying goods and services) forms about one-fifth of the EU’s total output (GDP) and is vulnerable to corruption, so better controls and integrity standards are needed

Corruption risks are generally greater at local and regional level

Many shortcomings remain in financing of political parties – often codes of conduct are not tough enough

Often the existing rules on conflicts of interest are inadequately enforced

The quality of corruption investigations varies widely across the EU

Swedish model

The EU study includes two major opinion polls by Eurobarometer, the Commission’s polling service.

Four out of 10 of the businesses surveyed described corruption as an obstacle to doing business in Europe.

Sweden „is undoubtedly one of the countries with the least problems with corruption, and other EU countries should learn from Sweden’s solutions for dealing with the problem”, Ms Malmstroem said, pointing to the role of laws on transparency and openness.

Organised crime groups have sophisticated networks across Europe and the EU police agency Europol says there are at least 3,000 of them.

Bulgaria, Romania and Italy are particular hotspots for organised crime gangs in the EU, but white-collar crimes like bribery and VAT (sales tax) fraud plague many EU countries.

Last year Europol director Rob Wainwright said VAT fraud in the carbon credits market had cost the EU about 5bn euros.

Corruption is widespread

EU Anti-corruption Report:

„At European level, three quarters of respondents (76%) think that corruption is widespread in their own country. The countries where respondents are most likely to think corruption is widespread are Greece (99%), Italy (97%), Lithuania, Spain and the Czech Republic (95% in each). A quarter of Europeans (26%), compared with 29 % showed by the 2011 Eurobarometer, consider that they are personally affected by corruption in 7 their daily lives. People are most likely to say they are personally affected by corruption in Spain and Greece (63% in each), Cyprus and Romania (57% in each) and Croatia (55 %); and least likely to do so in Denmark (3%), France and Germany (6% in each). Around one in twelve Europeans (8%) say they have experienced or witnessed a case of corruption in the past 12 months. Respondents are most likely to say they have experienced or witnessed corruption in Lithuania (25%), Slovakia (21%) and Poland (16%) and least likely to do so in Finland and Denmark (3% in each), Malta and the UK (4% in each).

Around three quarters of Europeans (73%) say that bribery and the use of connections is often the easiest way of obtaining certain public services in their country. This belief is most widespread in Greece (93%), Cyprus (92%), Slovakia and Croatia (89% in each). Similarly to 2011, around two in three Europeans (67%) think the financing of political parties is not sufficiently transparent and supervised. Most likely to hold that view are respondents from Spain (87%), Greece (86 %), and the Czech Republic (81%), while those least likely to hold this view are respondents from Denmark (47%), the UK (54%), Sweden (55%) and Finland (56%). Just under a quarter of Europeans (23%) agree that their Government’s efforts are effective in tackling corruption; around a quarter (26 %) think that there are enough successful prosecutions in their country to deter people from corrupt practices.

For the business-focused Flash survey the country results show striking variations: a difference of 89 percentage points between the highest (Greece: 99%) and lowest (Denmark: 10%) levels of perceived corruption. (The same result is reflected in the ‘Special Eurobarometer’ presented above: 20% vs 99%.) Indeed, all but one of the respondents from Greece are of the belief that corruption is widespread in Greece. At European level, more than 4 out of 10 companies consider corruption to be a problem for doing business, and this is true for patronage and nepotism too. When asked specifically whether corruption is a problem for doing business, 50% of the construction sector and 33% of the telecoms/IT companies felt it was a problem to a serious extent. The smaller the company, the more often corruption and nepotism appears as a problem for doing business. Corruption is most likely to be considered a problem when doing business by companies in the Czech Republic (71%), Portugal (68%), Greece and Slovakia (both 66%).

According to the 2013 Special Eurobarometer survey on corruption, (45%) of the Europeans interviewed believe that bribery and the abuse of positions of power for personal gain are widespread among officials awarding public tenders. The countries where respondents are most likely to think that there is widespread corruption among officials awarding public tenders include the Czech Republic (69%), the Netherlands (64%), Greece (55%), Slovenia (60%), Croatia (58%) and Italy (55%). Countries with the most consistent positive perceptions of officials in this area include Denmark (22%), along with Finland (31%), Ireland (32%), Luxembourg (32%) and the UK (33%)”.

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