Monday

26th Jun 2017

Opinion

EU should stop funding Croatia's corrupt networks

  • Former Croatian PM Ivo Sanader was convicted for corruption (Photo: CROPIX)

Global Financial Integrity (GFI), a Washington-based organisation, in December released a study stating that crime, corruption and tax evasion cost Croatia an astounding $15.2 billion (€11.3bn) from 2001 to 2010.

During the same period, Croatia received €1.5 billion in assistance from EU taxpayers and is scheduled to receive an additional €10 billion in EU funds during 2014-2020.

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.

EU taxpayers should stop all financial aid to Croatia until illicit enrichment amassed by its corrupt politicians and their partners in crime are confiscated including the $15.2 billion of illicit financial outflows.

In a pinprick strike against colossal corruption in Croatia, the country’s former Prime Minister Ivo Sanader was found guilty of taking bribes. The companies involved in bribing Sanader were Austrian-based Hypo Group Alpe Adria Bank (HGAA) and the Hungarian oil company MOL.

The political elite is hoping that Sanader’s case will convince Brussels that Croatia is addressing corruption and ready to join the EU in July 2013.

Yet, the question remains - where did the $15.2 billion end up and who is going to bring them back to Croatia’s treasury and how?

Croatia’s illicit financial outflows are much higher. During the past 20 years, proceeds from bribes, phony privatization schemes, illegal trade, arms and oil smuggling left Croatia and landed on secret bank accounts including HGAA branches in Austria and Liechtenstein.

After huge “losses” in the Balkans, HGAA was first sold to Bayern LB in 2007, costing German taxpayers €3.7 billion in a bailout subsequently, Vienna nationalized the bank, costing Austrian taxpayers nearly €1 billion.

Prince Michael of Liechtenstein took over HGAA Liechtenstein at the time of HGAA’s sale to Bayerische Landesbank, and then liquidated it. The accounts of Balkan corrupt politicians and criminals remained safe, protected by Liechtenstein’s bank secrecy.

Liechtenstein has long been accused of sheltering dirty money.

In 2008, the bi-partisan US Senate Permanent Subcommittee on Investigations led by US Senator Carl Levin accused the LGT Group of “advising US clients to open accounts in the name of Liechtenstein foundations to hide their beneficial ownership of the account assets", and establishing “transfer corporations” to disguise asset transfers to and from LGT accounts.

According to Austrian media, Darko Saric’s Balkan cocaine ring laundered $100 million from 2007 to 2009 through HGAA accounts primarily in Liechtenstein.

Croatia’s tarnished politicians and organized crime groups are benefiting from the nefarious “Balkan Route” originating in Afghanistan/Pakistan via Iran which is used to smuggle heroin, weapons and young women and children into Europe.

Several high-profile Balkan criminals arrested in Spain in February 2012 possessed official Croatian passports. Investigations led to Croatia’s Ministry of Interior and revealed a track record of the illegal sale of passports since 2006. No high-level Croatian official was held responsible.

Croatia does not need foreign financial aid but foreign assistance to stop illicit financial outflows and combat the mafia state.

Croatia’s citizens urgently need visiting judges and prosecutors from strong rule-of-law nations to establish an independent judiciary, assist local honest judicial experts, confiscate illicit enrichment amassed by corrupt politicians and their partners in crime and bring the $15.2 billion of illicit financial outflows back to Croatia.

The writers are co-founders of the Adriatic Institute for Public Policy.

Abysmal turnout in Croatia's EU vote

Two and a half months before Croatia joins the EU, just 21 percent of voters bothered to cast ballots in Sunday's election of 12 MEPs.

A positive agreement for Greece

The outcome of the Eurogroup meeting this week leaves a positive footprint, setting the basis for the Greek economy to exit the vicious circle of austerity and debt.

Britain preparing to jump off a cliff

Following the poor performance of Theresa May's Conservatives in the recent UK general election, her prospects of negotiating a good Brexit deal have gone from bad to worse.

Are MEPs too 'free' to be accountable?

The European Parliament is currently fine-tuning its negotiating position on the Commission's proposal from September 2016 for a mandatory transparency register. Sadly, so far it seems to prefer empty statements to bold action.

News in Brief

  1. Merkel and Macron hold symbolic joint press conference
  2. Juncker has 'no' clear idea of kind of Brexit UK wants
  3. Belgian PM calls May's proposal on EU citizens 'vague'
  4. UK lacks support of EU countries in UN vote
  5. Spain to command anti-smuggler Mediterranean force
  6. Estonia confirms opposition to Nord Stream 2 pipeline
  7. Ireland and Denmark outside EU military plan
  8. EU leaders renew vows to uphold Paris climate deal

Stakeholders' Highlights

  1. EPSUOn Public Services Day, Stop Austerity! Workers Need a Pay Rise!
  2. EGBAOnline Gambling: The EU Court Rejects Closed Licensing Regimes In Member States
  3. World VisionFaces of Today, Leaders of Tomorrow: Join the Debate on Violence Against Girls - 29 June
  4. ECR GroupThe EU Must Better Protect Industry from Unfair Competition
  5. Malta EU 2017Better Protection for Workers From Cancer-Causing Substances
  6. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  7. Dialogue PlatformGlobalised Religions and the Dialogue Imperative. Join the Debate!
  8. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million
  9. EUSEW17Bringing Buildings Into the Circular Economy. Discuss at EU Sustainable Energy Week
  10. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  11. Malta EU 2017End of Roaming Charges: What Does It Entail?
  12. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move

Latest News

  1. Macron’s investment screening idea watered down by leaders
  2. Leaders unimpressed by May’s offer to EU citizens
  3. New Irish PM praises unscripted nature of EU summits
  4. EU extends sanctions on Russia
  5. UK's universities set 'Brexit wish list'
  6. Decision on post-Brexit home for EU agencies postponed
  7. May's offer on citizens’ rights dismissed as ‘pathetic’
  8. 'Historic' defence plan gets launch date at EU summit