Transparency International Study Finds Hungary Most Corrupt Country in EU

In 2022, Hungary scored 42 points on a scale from zero (most corrupt) to 100 (least corrupt), ranking 77th out of 180 countries. The results are worse than those of its direct regional competitors. The Czech Republic and Slovenia reached 41st place with 56 points. Poland ranked 45th with 55 points, Slovakia 49th with 53 points, and Croatia 57th on 50 points.

However, the Government Information Center dismissed TI’s findings, saying, “It is interesting that Transparency International did not investigate the Brussels bureaucracy or the European Parliament; they were left off the list.”

It also labeled TI a member of the “Soros network,” which it accuses of being behind the corruption scandals in Brussels and funneling money to the Hungarian opposition.

“This network finances the campaign of the domestic and international left and serves it with all its lying reports,” the center said.

TI, however, says there has been a clear downward trend. In the 2012 report, Hungary was ranked 19th. By last year, Hungary had lost the minimal lead it held from 2020 against the poorest performing country of the EU: Bulgaria improved somewhat, while Hungary’s position worsened. Overall, Hungary’s ranking in the world corruption index has decreased the most in the last 10 years.

“Corruption is making the world we live in a more dangerous place. Weak government action against corruption has also increased the risk of violence, putting citizens at risk. The only way out of the current situation is for governments to take up the fight against corruption, standing up to guarantee the well-being of society as a whole, not just a narrow elite,” said Delia Ferreira Rubio, chair of TI.

Comprehensive Analysis

In parallel with the presentation of the Corruption Perception Index, TI Hungary also published its annual report on corruption, which comprehensively analyzes the state of the rule of law, public procurement, and the use of EU funds, as well as the impact of corruption on economic performance.

Among the most significant developments in 2022, for the first time in the history of the EU, the European Commission launched a rule of law procedure against Hungary after the parliamentary elections in April, tying the availability of EU funds to conditions, the report notes.

It also states that the steps taken under EU pressure and designed to curb the misuse of EU funds can be considered the only serious anti-corruption measures of Hungary’s NER (System of National Cooperation) period.

“If the commission rigorously monitors the implementation of the new rules, misuse of EU funds can be expected to decrease in the future, but the institutional destruction of the last decade will not be undone, and the rule of law will not be restored ‘in one fell swoop,’” said József Péter Martin, executive director of TI Hungary.

Although Hungary has been one of the largest beneficiaries of the EU budget, the inflow of money has not contributed to increased efficiency or economic activity measured by the number of businesses; inequalities have not decreased either, but corruption has increased, TI Hungary argues.

The organization says that the economic weight of public procurement in Hungary remains significant, while the system’s exposure to corruption is high. The European Commission has repeatedly drawn attention to the high rate of single-bid tenders in public procurement, which significantly reduces the intensity of competition.

Target Missed

The 35% rate of single-bid tenders in procurements above the EU threshold remains well above the EU target of 15%. The competitive conditions for obtaining public contracts are further worsened by the government regularly exempting the most important procurements from traditional public procurement procedures, TI claims.

Hungary became the most corrupt country in the EU despite robust economic growth in the seven years leading up to the coronavirus epidemic, according to the chapter on economic trends in TI Hungary’s report.

As in previous years, there remains a strong correlation between national income and corruption in the EU. Hungary is stuck in the EU’s lower league of member states with low national income by EU standards, even though its gross domestic product (GDP) per capita increased by some 39% between 2013 and 2022. The main reasons Hungary failed to improve its position among the EU countries are the deterioration of the rule of law and systemic corruption, TI says.

In reaction to TI’s findings, the Organization for Economic Cooperation and Development (OECD) called on Hungary to step up its fight against corruption.

OECD says that Hungary must report to the organization’s Working Group on Bribery by June 2023 that it has made significant progress in addressing outstanding recommendations relating to its implementation and enforcement of the OECD Anti-Bribery Convention, or the Working Group will send a high-level mission to Budapest.

The organization also remains seriously concerned about Hungary’s low level of foreign bribery enforcement, noting that no significant foreign bribery case has been detected or investigated since March 2012.

This article was first published in the Budapest Business Journal print issue of February 10, 2023.