Thursday

23rd Feb 2017

EU has 'no corruption-free zone'

  • MEPs want people who are convicted by a final judgment of money laundering to be excluded from bidding for any public procurement contract anywhere in the EU (Photo: Images_of_Money)

Corruption across the EU bloc is costing taxpayers billions, as member states fail to tackle the problem head on, according to the European Commission.

The Brussels executive on Monday (3 February) published its first ever bi-annual anti-corruption report on each of the 28 EU countries, citing public procurement and obscure political party financing as among the most pervasive problems.

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“We are not doing enough and this is true in all member states,” EU commissioner for home affairs Cecilia Malmstrom told reporters.

Public procurement contracts, equivalent to one-fifth of the total EU economy, are said to be the worst affected with up to a quarter of their value lost to corrupt practices.

Around 32 percent of the companies who tendered public contracts say they lost the winning bid because of corruption, with construction and engineering firms the worst affected.

Other EU-wide member state pitfalls include murky political party financing, the tight relationship between the business and political elite, and general graft at the local level.

The commission estimates some €120 billion is lost every year, although Malmstrom said the true figure is likely to be much higher.

The figure is based on 2009 estimates from studies by a number of international bodies like the International Chamber of Commerce and the UN Global Compact, which suggest corruption amounts to 5 percent of GDP at world level.

For its part, Olaf, the EU anti-fraud office, in a report it commissioned out last year gave a more precise figure.

The Olaf-sponsored report, drafted by jointly by accountancy firm PwC EU Services and Ecorys with the support of the University of Utrecht, claimed up to €2.2 billion of public and EU funds for public procurement contracts was lost in eight member states in 2010 alone.

The commission says its new anti-corruption report is necessary to help pressure member states into action. No sanctions or EU legislative initiatives specifically tailored to crack down on corruption are foreseen.

But the issue has seized most Europeans as a major problem.

An EU-wide barometer survey’s suggest 76 percent of Europeans think corruption is wide spread and more than half believe it has increased in the past three years.

Around 75 percent of respondents in Spain, Slovenia, the Czech Republic, Italy, and Portugal think corruption has increased.

At 99 percent, almost everyone of the Greek respondents feel corruption is widespread, followed by 97 percent in Italy and 95 percent in Lithuania, Spain, and the Czech Republic.

In comparison, more Nordic countries think corruption is rare. Around 75 percent of Danish respondents say its rare, followed by 64 percent in Finland and 54 percent in Sweden.

Companies are also affected, with around half saying they need political connections to succeed in their country of business.

Meanwhile, a chapter dedicated to the EU institutions was not published as originally announced.

The commission says the chapter was not written because there are no independent external reviews it could draw on to evaluate its own institutions.

The commission is set to produce the EU chapter when the next EU-wide report is released in two years time.

The delay comes as pro-transparency campaigners often complain the EU legislative process is conducted behind closed doors.

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