Study blames regulatory environment for corruption in Hungary

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Though Hungary's corporate and competition law are adequate, the country's broader regulatory environment contributes to systemic corruption in the country, Transparency International (TI) said.

Hungary's party financing law, loopholes in the public procurement law, a lobbying law that does not work and a dysfunctional bankruptcy law create a mechanism of corruption, Noémi Alexa, who heads the TI unit in Hungary, said at the presentation of a study on Monday.

The TI study says corruption in Hungary is made worse by the strong influence of personal networks, local councils' financial troubles, the low salaries of politicians and local council representatives and a lack of political will when it comes to cracking down on the problem.

TI estimates corruption raises the price of public procurements 20%-25%.

UK ambassador to Hungary Greg Dory said big foreign investors see corruption as a serious problem in Hungary, one that makes it less capable of attracting capital and less competitive. Hungary' political elite could do a lot to eliminate this impression through reforming party financing, Dory said.

TI's regional director for Central Asia an Europe Marshall Miklos said a radical reform of Hungary's tax system, in the interest of reducing corruption, must be carried out within one or two years if Hungary's competitiveness is not to be hurt further. (MTI – Econews)

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