News / Economy

EU Reels From ‘Breathtaking’ Corruption Report

European Commissioner for Home Affairs Cecilia Malmstrom addresses the media, at the European Commission headquarters in Brussels, Monday, Feb. 3, 2014.European Commissioner for Home Affairs Cecilia Malmstrom addresses the media, at the European Commission headquarters in Brussels, Monday, Feb. 3, 2014.
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European Commissioner for Home Affairs Cecilia Malmstrom addresses the media, at the European Commission headquarters in Brussels, Monday, Feb. 3, 2014.
European Commissioner for Home Affairs Cecilia Malmstrom addresses the media, at the European Commission headquarters in Brussels, Monday, Feb. 3, 2014.
The European Union is taking a closer look at itself in the aftermath of a recent report that showed what one official called a “breathtaking” web of corruption.

The EU Anti-Corruption Report issued earlier this month detailed corruption among its 28 member states through tax avoidance, improper invoicing of trade, bribery, and other illicit acts that add up to some 120 billion Euros – more than US $160 billion – a year.

The EU’s watchdog has called for a probe.

"The EU administration has to live up to the very highest standards," European Ombudsman Emily O'Reilly said in a statement.

The 41-page report states that while corruption is far more prevalent among some EU states than others, it exists everywhere.

“One thing is very clear – there is no corruption-free zone in Europe,” says EU Home Affairs Commissioner Cecilia Malmstrom, who describes the level of illicit activity as “breathtaking.”

“The long standing absence of comprehensive anti-corruption strategies in some Member states which are facing systemic corruption problems,” the report says, needs to be responded to by “a comprehensive coordinated approach at [the] central level.”

As it stands now, there is a patchwork of laws among members, and the European Parliament has not always found agreement as to how to best tighten controls.

Polls show citizen concern

Just over three out of four EU citizens polled by the EU’s Eurobarometer survey say they think corruption is widespread within their own countries.

Greeks are near- unanimous at 99 percent, and 97 percent of Italians agree.  But right behind them, with 95 percent agreeing are Lithuania, Spain, and the Czech Republic.

On a personal level, a quarter of all EU citizens say corruption directly affects them.  Among Spaniards and Greeks, that leaps to nearly two-thirds.
 
A majority of Cypriots, Romanians, and Croatians also reported personal contact with corruption.  On the brighter side, only four percent of the people in the UK and Malta were personally affected, with Denmark and Finland even better, at three percent.

Bribery, the universal symbol of corruption, was surveyed directly. People were asked if they personally ever had to pay a bribe to an official. The UK, Denmark, Finland, Sweden, and Luxembourg all came in below one percent.

At only two percent were Germany, the Netherlands, Belgium, France, and Estonia.  Austria came in at five percent.  On the higher end were Hungary, Slovakia, and Poland, but all were at or under fifteen percent.

Business impacts

Overall, 40 percent of the EU businesses surveyed said they believe corruption is widespread.

But that soared to two thirds of the companies polled in the Czech Republic, Slovakia, Greece, and Portugal. Two professions – contracting and engineering – told the survey that about a third of their businesses have encountered illicit activity.

The February 3 report noted that while transparency laws are widespread, they’re not robust enough EU-wide, and not uniformly followed by member states.

It also points out these countries have not come to common terms on holding elected officials accountable for their behavior, stating “there is a need for a clear harmonization of criminal liability of elected officials for corruption offenses.”

Elections feed on donations to candidates and their parties.

The report says that once again, there needs to be greater uniformity among member states with stronger regulations on reporting contributions and other activities.  It also brought up the need for tighter asset disclosure laws covering public office holders.

Culture of collusion

Another section found widespread failures in controlling a culture of collusion between politicians and the business community.

That includes favors connected to lobbying, the revolving job door between public office and corporations, and a lack of oversight of the public contracting process.
State-owned companies came under a separate spotlight.

The report says that in some member states, “There is little transparency regarding the allocation of funds, and in some cases, purchases of services by these companies.”

It goes on to say: “Recent investigations into alleged misuse of funds, corrupt practices, and money laundering linked to state owned companies indicate the high level of corruption-related risks in this area, as well as the weakness of control and prevention.”

The EU report also admits there are deficiencies in laws and regulations covering public access to information, and legal protections for whistleblowers who bring corrupt acts to light.

Watchdog group responds

The watchdog group Transparency International responded critically, saying “the report, however, fails to issue detailed recommendations” as to how to bolster laws and procedures to resolve those critical problems.

Edda Muller, Chair of Transparency International – Germany, reacted to the EU report with a call for Brussels and its member states to extend the anti-corruption fight beyond Europe’s borders to nations where members are engaged in NATO and other military actions.

EU member states “have to further integrate,” she says, “approaches to good governance, rule of law, and anti-corruption in their peace operations.”  Cited directly were Afghanistan, and Sahel countries in Africa as areas where military-related corruption is rampant.

London-based attorney Alastair Craig, writing in fcpablog.com (Acronym for the Foreign Corrupt Practices Act) raises a pointed question regarding the EU’s report.
“One issue it does not illuminate is why recent offers of EU membership were not made conditional on candidate countries putting in place appropriate and harmonized anti-corruption regimes,” he wrote.

Perhaps the greatest criticism of the report is that Brussels does not live up to its own standards.

Michael Levi, in an analysis of the EU report published in the Beirut Daily Star and elsewhere, notes that it's “rather unfortunate for the commission’s credibility, not [to focus as well] on corruption in EU institutions, as was originally envisaged.”

“This reflects political sensitivity, but is hard to justify if the commission claims to be bold,” he wrote. “Future reports would benefit from greater boldness and efforts to evaluate anti-corruption measures rigorously.”

Jeffrey Young

Jeffrey Young came to the “Corruption” beat after years of doing news analysis, primarily on global strategic issues such as nuclear proliferation.  During most of 2013, he was on special assignment in Baghdad and elsewhere with the Special Inspector General for Iraq Reconstruction (SIGIR).  Previous VOA activities include VOA-TV, where he created the “How America Works” and “How America Elects” series, and the “Focus” news analysis unit.

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