ADVERTISEMENT

On corruption in the European Union

EU

As an expert reviewer of the EC Anti-Corruption Report released last week, Michael Levi got some interesting insight into the viability of taming a beast which costs the EU some €130 billion per year. Levi shared his thoughts on the report and its potential efficacy with BBJ…

A rise in crime rate can sometimes represent social progress rather than decay if it reflects a growth in awareness and intolerance of the conduct in question. So it is with corruption: When officials extort bribes from businesspeople and citizens shrug their shoulders and accept this as an inevitable reality, there is insufficient outrage to solve the problem.

“Problem-oriented policing” requires an assessment of the problem and the development of a strategy to reduce it or eliminate it altogether. Once this process has begun, it becomes harder and harder to deny the problem. That doesn’t mean that there is always enough political will for real change to occur, but it is a start.

The European Commission’s first report on corruption in the European Union should be seen within this framework. Ever since Transparency International developed the first crude Corruption Perceptions Index in 1995, corruption league tables have challenged countries to improve their relative standing.

When EU Commissioner for Home Affairs Cecilia Malmstrøm was persuaded that there was a need for the EU to take a stronger line against corruption, she approved the idea of a biennial review of how well or badly the EU and its institutions were performing against corruption.

The first review was released in a report earlier this week. This report was written by staff in Malmström’s department and went through the commission’s usual internal consultation process. Members of the appointed expert group – myself included – provided feedback on individual draft chapters. The contents of those deliberations are confidential, but what follows is a personal judgment about the exercise and what it communicates.

While the cost of corruption will never be known precisely, the report estimates its cost to the EU economy at €120 billion per year. This does not include social and cultural costs, which may be much larger than the bribes. For example, small bribes for not properly checking road and building construction can have huge environmental consequences.

There are reports on corruption and countermeasures in all individual countries in the EU – though (rather unfortunate for the Commission’s credibility), not on corruption in EU institutions, as was originally envisaged. But the main report is a little shy about naming and shaming. It does not even mention, for instance, that Germany is the one EU member state that has failed to ratify the UN Convention against Corruption. This reflects political sensitivity, but is hard to justify if the commission is claiming to be bold.

The word “corruption” has a flexible meaning. To some people, it means cronyism, or that powerful interests can override popular ones because of political funding (or sometimes personal bribes). So it is not surprising that most of the people who think their country is corrupt have never been asked for or offered a bribe. In this sense, seeing your country as corrupt is a vote of no confidence in its meritocracy and fairness.

There are wide variations within the EU in both the experience and perceptions of corruption. Southern Europeans and those from the former Soviet Union (e.g., Poland, Lithuania, and Slovakia) are most likely to say they have witnessed corruption and that their country is corrupt. As for EU businesses, they stated that corruption was the biggest problem in construction and IT/telecoms.

The report notes that formal anticorruption mechanisms do not necessarily reduce corruption, and that, “In some Member States, politicisation of recruitment for mid-management and lower positions in public administration at central or regional/local level have been highlighted as serious problems.”

The report also makes a tough statement against political opposition: “in the Commission’s view, in order to come to a common approach in the EU, there is a need for a clear harmonisation of criminal liability of elected officials for corruption offences.” (I would add that criminal law alone does not guarantee action, and that we also need civil liability to strip the gains.)

In addition, the report criticizes lack of transparency in party funding in some member states, and pushes for more effective asset disclosure and preventative efforts using non-criminal mechanisms.

Altogether, the report contains a useful range of anticorruption measures and practices that are of interest throughout the world. EU member states vary culturally and economically, and they offer an interesting crucible within which we can see the effects of policies and practices.

This first report shows that the European Commission appreciates that corruption is a serious issue affecting its own legitimacy and credibility. Future reports would benefit from greater boldness and efforts to evaluate anticorruption measures rigorously, as has been attempted recently with procurement.

The key message is that we cannot rely on criminal justice, or on institutions alone. We need to focus on practices of transparency, prevention, and whistle-blowing on the ground – but if you whistle and nobody does anything about the problem, no progress will be made.

– written by Michael Levi, provided to BBJ by The Mark News

Michael Levi was part of an appointed group which reviewed the European Commission Anti-Corruption Report. He teaches criminology at Cardiff University and is a top expert on corruption in Europe.

ADVERTISEMENT

Fiscal, monetary policy partnership needed to rein in CPI - ... Analysis

Fiscal, monetary policy partnership needed to rein in CPI - ...

Parliament approves amendment to Competition Act Parliament

Parliament approves amendment to Competition Act

New CEO announced at Codic Hungary Appointments

New CEO announced at Codic Hungary

FAO–Food Bank convoy delivers food to those in need City

FAO–Food Bank convoy delivers food to those in need

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.