Wednesday

27th Oct 2021

Corruption costs EU €71bn a year

  • Corruption has an economic as well as social and political cost, a European Parliament study says (Photo: Images_of_Money)

The lack of EU-wide action against organised crime and corruption costs the EU at least €71 billion each year, according to a study published by the European Parliament.

Corruption itself costs the EU economy up to €900 billion each year when lost tax revenues are taken into account, but also the social and political costs such as more unequal societies, high levels of organised crime or a weaker rule of law and the public mistrust it generates.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The estimate goes well beyond the €120 billion figure usually put forward by the European Commission, which takes into account only the loss of tax revenue and investment.

The findings are part of a research project at the European Parliament on the "cost of non-Europe".

The study on organised crime and corruption was commissioned last September by the EP's civil liberties, justice and home affairs committee and recently published by the European parliamentary research service.

It is based on three reports carried out by the Rand Europe and CEPS think-tanks and and Oxford academic, Federico Varese.

"The lack of ratification, transposition, implementation and enforcement of international and EU norms poses one of the main barriers in the European fight against organised crime and corruption," the study says.

In its fight against organised crime and corruption, the EU is hampered by "the lack of a proper EU definition of organised crime, the absence of an EU directive approximating corruption in the public

sector, the lack of an EU-wide system of whistle-blower protection and the fact that there is no consolidated framework for police and judicial cooperation", the study says.

Whistle-blower protection

In their recommendations to EU policy makers, the authors of the study say that establishing an "effective and truly independent" European public prosecutor working with Europol and Eurojust, the EU's police and justice agencies, would save the EU budget €200 million annually. The figure is based on a predicted increase in prosecution and conviction rates.

The study also recommend to integrate the different EU monitoring mechanisms into "a broader rule of law monitoring framework". The move would save €70 million annually thanks to potential gains of GDP.

One sector particularly vulnerable to corruption is public procurement, with an annual cost estimated at €5.33 billion each year.

The study recommends the establishment of a "full EU-wide e-procurement system". It says that would reduce cost of corruption risk in public procurement by €920 million a year.

Other recommended measures are a better protection of whistle-blowers both in EU institutions and member states, as well as a better mutual recognition of freezing and confiscation orders and cooperation for the European arrest warrant.

Bulgaria seen as most corrupt in EU

The latest report from Transparency International ranks Bulgaria as the most corrupt in terms of perception in the entire EU.

Croatia and Hungary are 'new face of corruption'

Transparency International said the crackdown on civil society in Croatia and Hungary "under the guise of a nationalist, ‘illiberal’ agenda" represented the new face of corruption in Europe.

Feature

Covid-hit homeless find Xmas relief at Brussels food centre

The Kamiano food distribution centre in Brussels is expecting 20 people every half hour on Christmas Day. For many, Kamiano is also more than that - a support system for those made homeless or impoverished.

Top court finds Hungary and Poland broke EU rules

EU tribunal said Hungary's legislation made it "virtually impossible" to make an asylum application. Restricting access to international protection procedure is a violation of EU rules.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew report reveals bad environmental habits
  2. Nordic Council of MinistersImproving the integration of young refugees
  3. Nordic Council of MinistersNATO Secretary General guest at the Session of the Nordic Council
  4. Nordic Council of MinistersCan you love whoever you want in care homes?
  5. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  6. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals

Latest News

  1. How to break the political deadlock on migration
  2. Hedegaard on the hazards of stalling climate action
  3. Belarus exiles in EU fear regime-linked murderers
  4. No place for Polish 'war' rhetoric, Commission says
  5. Nine countries oppose EU gas market reform
  6. EU-UK impasse on top court in post-Brexit customs talks
  7. Erdoğan orders out US and EU ambassadors
  8. EU banks play 'major role' in deforestation, report finds

Join EUobserver

Support quality EU news

Join us