Dirty money
May 3, 2012
It's not about a few euros that change hands illegally or aren't reported to tax authorities. The Greek financial crisis has been a drastic eye-opener for European Union officials, showing how large-scale graft and corruption are partially responsible for driving a national economy to ruin.
Greece ranks eightieth on Transparency International's 183-country corruption index, and the organisation is likewise critical of Hungary, Bulgaria, Croatia, the Czech Republic and Italy. Even Germany isn't free of corruption. It's ranked fourteenth within Europe and comes in 14th worldwide.
"The estimated economic costs of corruption in the EU are as high as 120 billion euros ($157.6 billion) per year," says EU Home Affairs Commissioner Cecilia Malmström. That's the equivalent of the entire budget of the EU government and one percent of the EU's gross domestic product.
Corruption differs from country to country, but it is harmful to all EU member states and the EU as a whole. It leads to a fewer investments, damages domestic markets and sucks resources from public finances.
Lacking a strategy
According to recent Europe-wide polls, a majority of Europeans feels corruption is a permanent problem that is on the rise. That means that the EU has to act or risk compromising its credibility.
But experts say no real progress is being made.
"There has never been any agreement on measures that would yield results," Dominik Enste of the Cologne-based German Economic Institute (IW) told DW. Although Enste did say some individual states had begun to tackle the problem.
Nienke Palstra of Transparency International says it's a positive sign that corruption is now on the agenda.
"We welcome the fact that corruption has been put more firmly on the agenda, but it is important that this lip-service now gets translated into real improvements in the integrity systems of these countries,“ Palstra told DW.
Lacking political will
Experts say that European states are well-aware of the problem, and know where it comes from and how they could fight it. What they lack is the political will to take action.
"Of course one of the main challenges is the lack of commitment among the politicians and decision-makers to push for a zero-tolerance-policy towards corruption," Malmström said. "The roots are there, but without the political engagement to enforce them effectively the results remain weak."
Just last year, the EU adopted a package of anti-corruption measures, including a report to be published once every two years. It is aimed at "pointing out deficiencies among the 27 member states and boosting the states' willingness to act," Malmström said.
The measures mark an important step forward, both Enste and Palstra said, but the initiative doesn't go far enough: misconduct cannot be persecuted at EU level.
Obstacle to enlargement
Corruption could set back EU expansion by years, as candidates from corruption-prone Southeastern Europe like Croatia or Serbia come in for increased scrutiny.
But such checks are necessary. Strict adherence to accession rules, says Enste,could "prevent the EU from experiencing problems similar to the current debt crisis."
The first European anti-corruption report, to be published next year, will likely create political pressure, especially on candidates for EU membership. The report is also expected to focus on EU members Bulgaria and Romania, who are trying to join Europe's open-border Schengen zone. They'll need to do well in the report to achieve that aim.
The long-term goal is to change attitudes.
"The point is to reach people's heads and hearts so that they feel like they are swindling themselves, when they swindle the state, because they are part of the state," Enste said.
Malmström concurs with that assessment.
"The purpose is not to bring member states to the court but to highlight the problem," the EU Commissioner said. "We are losing the whole EU-Budget in corruption. It's an enormous amount of money, and it affects not only the economy but also trust in polticians."
Author: Ralf Bosen / jc
Editor: Neil King