Tuesday

27th Sep 2016

€120 billion lost to corruption in EU each year

  • 'Deep-rooted corruption is a part of reality in many countries,' says EU home affairs commissioner Cecilia Malmstrom (Photo: European Commission)

An estimated €120 billion is lost to corruption each year throughout the 27 member states, the EU commissioner for home affairs Cecilia Malmstrom has said.

“In public procurement, studies suggest that up to 20 to 25 percent of the public contracts’ value may be lost to corruption,” said Malmstrom on Tuesday (5 March) at an anti-corruption seminar in Göteborg, Sweden.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The Berlin-based Transparency International (TI) noted in a report out in the 2012 that the worse offenders in public procurement cases are Bulgaria, the Czech Republic, Italy, Romania and Slovakia.

Public procurement contracts in the EU have an estimated worth of around 15 percent of the EU’s total GDP.

But EU legislation designed to ensure good governance on the contracts are often flouted, says TI. In some cases, the complexities of the laws and administrative burdens provide an additional incentive to find loopholes.

As an example, the transparency group found that three out of five managers of small companies in the Czech Republic believe they have to resort to bribery and kickbacks to win a public contract.

Europe’s poorest nation Bulgaria does not publish final procurement contracts. This practice is also common in Italy, notes the group.

In some cases, member states rolled back progress on fighting corruption after joining the Union.

TI says corruption-fighting practices in the Czech Republic, Hungary and Slovakia have all weakened since EU accession.

It also notes that Greece, Italy, Portugal and Spain have serious deficits in public sector accountability.

“The links between corruption and ongoing-financial and fiscal crisis in these countries can no longer be ignored,” says TI.

The European Commission hopes to spur political will among member state leaders to tackle the problem by publishing an anti-corruption report later this year.

The report will address corruption trends across the EU and the policies in place to fight it.

Malmstrom said the report, by rendering public corruption practices in individual member states, will “to some extent, stimulate political commitment to fight corruption more vigorously.”

Meanwhile, Finland on Tuesday cited corruption as the primary reason why it too, along with Germany, will block Romania and Bulgaria’s bid to join the passport-free Schengen zone, reports Finish state-broadcaster Yle.

“Too many questions were left unanswered which we now have to deal with,” said Finland’s Interior minister Päivi Räsänen.

EU ministers of interior are meeting in Brussels on Thursday and Friday to discuss the issue, among others.

Stakeholders' Highlights

  1. EFAMessages of Hope From the Basque Country and Galicia
  2. Access NowDigital Rights Heroes and Villains. See Who Protects Your Rights, Who Wants to Take Them Away
  3. Martens CentreQuo Vadis Georgia? What to Expect From the Parliamentary Elections. Debate on 29 September
  4. EJCAppalled by Recommendation to Remove Hamas From EU Terrorism Watch List
  5. GoogleBringing Education to Refugees in Lebanon With the Clooney Foundation for Justice
  6. HuaweiAn Industry-leading ICT Solution Provider and Building a Better World
  7. World VisionUN Refugees Meeting a Wasted Opportunity to Improve the Lives of Millions of Children
  8. Belgrade Security ForumCan Democracy Survive Global Disorder?
  9. YouthProAktivEntrepreneurship, Proactivity, Innovation - Turn Ideas Into Action #IPS2016
  10. GoogleTrimming the Waste-Line: Weaving Circular Economy Principles Into Our Operations
  11. Crowdsourcing Week EuropeDon't Miss the Mega Conference to Master Crowdsourcing, Crowdfunding and Innovation! 10% Discount Code CSWEU16
  12. ACCAKaras Report on Access to Finance for SMEs in a Capital Markets Union