Monday

9th Dec 2019

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

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join 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.

News in Brief

  1. Greece denies access to fair asylum process, report says
  2. Report: Self-regulation of social media 'not working'
  3. Turkey: Greek expulsion of Libyan envoy 'outrageous'
  4. Merkel coalition may survive, says new SPD co-leader
  5. Von der Leyen Ethiopia visit a 'political statement'
  6. Over 5,500 scientists ask EU to protect freshwater life
  7. Iran defies EU and UN on ballistic missiles
  8. Committee of the Regions: bigger budget for Green Deal

Stalling on VAT reform costing billions, says Commission

German media outlet Correctiv, along with other newsrooms, have revealed how criminals annually cheat EU states out of billions in VAT fraud. The EU Commission says solutions exist - but member states refuse to budge on tax unanimity.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. Russia makes big promises to Arctic peoples on expansion
  2. UK election plus EU summit in focus This WEEK
  3. Migrants paying to get detained in Libyan centres
  4. Searching for solidarity in EU asylum policy
  5. Will Michel lead on lobbying transparency at Council?
  6. Blood from stone: What did British PR firm do for Malta?
  7. EU Commission defends Eurobarometer methodology
  8. Timmermans warns on cost of inaction on climate

Join EUobserver

Support quality EU news

Join us