Monday

2nd Oct 2023

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.

Column

Will Poles vote for the end of democracy?

International media must make clear that these are not fair, democratic elections. The flawed race should be the story at least as much as the race itself.

Opinion

Orbán's 'revenge law' is an Orwellian crackdown on education

On Tuesday, the Hungarian parliament passed a troubling piece of legislation known by its critics as the 'revenge law', which aims to punish and intimidate teachers who dare to defy Viktor Orbán's regime. This law is a brutally oppressive tool.

Latest News

  1. EU women promised new dawn under anti-violence pact
  2. Three steps EU can take to halt Azerbaijan's mafia-style bullying
  3. Punish Belarus too for aiding Putin's Ukraine war
  4. Added-value for Russia diamond ban, as G7 and EU prepare sanctions
  5. EU states to agree on asylum crisis bill, say EU officials
  6. Poland's culture of fear after three years of abortion 'ban'
  7. Time for a reset: EU regional funding needs overhauling
  8. Germany tightens police checks on Czech and Polish border

Stakeholders' Highlights

  1. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  2. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  6. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch

Join EUobserver

Support quality EU news

Join us