EU and Corruption
A Warning Report
As Alina Mungiu Pippidi, Professor of Democracy Studies at Hertie School of Governance
said at the 13th International Anti-Corruption Conference in Athens, the anti-corruption
problem in the EU is being tackled by everybody and nobody in particular.
The EU does not have a specific and comprehensive anti-corruption strategy. Anticorruption measures are primarily defined by OLAF which is rather isolated in its operations
and has somewhat limited jurisdiction and resources that do not allow for an adequate
response to corruption related problems in EU member states.
The general breakdown of the EU budget shows emphasis on the sustainable development and
protection of natural resources, although we might argue that the most visible part of EU
policies refers to enlargement processes (acceptance of new member states) and to structural
issues (Lisbon Agreement).
EU Financial Framework 2007 – 2013, available at
http://ec.europa.eu/budget/prior_future/fin_framework_en.htm
The challenge that will be placed before future EU budgets and public policy processes refers
precisely to the direction the EU will take in relation to (anti)corruption. This is a
carcinogenic like problem that seems to be threatening the EU system of governance,
decreasing efficiency, the productivity of outputs and negatively impacting the entire policy
process. Consequently, corruption is also threatening the success of policies aimed at
sustainable development and natural resources conservation.
The global economic and financial crisis has seen the developed countries faced with the need
to seek out additional sources of currency reserves. Despite the EU’s efforts to uphold
positive economic growth the projected rates of growth are negative for 2009 and 2010. .
One of the crucial questions is – Where will the EU look for economic growth potential?
The World Bank estimates that corruption can cause a decrease in the economic growth rate
of up to 1 % annually. The IMF research report states that there are 5% less investments in
corrupt countries when compared to countries where corruption is not a pervasive problem. In
times when every euro is being counted, these percentages should not be taken lightly.
While researching for this policy report we have come across data that indicates correlations
between rising levels of corruption and deteriorating economic growth rates in EU member
states. All EU member states that in the past three years have seen decline on the Corruption
Perception Index (CPI) conducted annually by Transparency International that surpassed 5%
also faced relatively low GDP growth rates in 2011.
EU member country
Malta
United Kingdom
Portugal
Spain
Austria
Italy
Greece
GDP Growth Forecast 2011
1.7%
2.1%
0.7%
0.8%
1.6%
1.4%
-0.5%
CPI four year trends
-12 %
-9%
-8%
-7 %
-7%
-6 %
-6%
At the same time, countries that have achieved improvements on the TI CPI scale have faced
positive GDP growth rates projections for 2011 despite the recession.
EU member country
Poland
Cyprus
Romania
Netherlands
Slovenia
GDP Growth Forecast 2011
3.3%
1.3%
3.5%
1.8%
1.8%
CPI four year trends
13 %
10 %
7%
2%
2%
In addition, in the past four years more than half of EU member states (17 out of 27)
have faced a decline on a TI CPI scale which should be perceived as a warning sign in
relation to efficiency of EU anti-corruption policies and strategies.
CPI 4 Year Trends in EU countries
15
CPI precentage change in 4 yrs
10
5
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
-5
-10
-15
-20
EU countires
Corruption and EU enlargement
The European Commission's standpoint reflected in public policies is that corruption is the
problem of individual governments and it is the governmental authorities who should be the
chief bearers of anti-corruption initiatives. When it comes to EU enlargement, the so called
conditional approach that requires candidate countries (and countries that signed the SAA) to
adopt measures and conduct reforms aimed at suppression of corruption, results in positive
trends – candidate and SAA countries face improvement on the TI CPI scale and there is an
overall feeling of improvement prior to EU accession.
However, specific examples indicate derogation of the anti-corruption system right after
accession that eventually might lead to decline on the TI CPI scale. Slovenia, Romania, Latvia
and the Czech Republic either closed or weakened their anti-corruption offices, Romania and
Bulgaria still face numerous obstacles in achieving the full impact of anti-corruption
initiatives while in Croatia the escalation of violence related to organized crime and
corruption clearly shows that anti-corruption measures have not positively impacted the
problem in adequate manner.
It is especially important to take into account the possible influence of corruption on EU
decision making bodies after one more phase of enlargement i.e. after EU accession of the
Western Balkans countries and Turkey.
For the purpose of this paper, we will divide the EU member states and the candidate and
SAA countries in three categories. The first category comprises of countries with TI CPI
between 0 and 5 i.e. countries characterized by „organized“ corruption and/or state capture. In
the second category we have countries with TI CPI between 5 and 7 where there are
indications of systemic corruption and anti-corruption bodies cannot efficiently respond to the
problem. The countries with TI CPI between 7 and 10 are in the third category – these are
countries where corruption is incidental and where efficient anti-corruption mechanisms are in
place.
In 17 out of 27 EU member states (62%) the TI CPI in 2008 was below 7 which shows that
the large part of the EU territory faces problems with corruption i.e. the suppression of
corruption in these 17 member states is not efficient enough. The average TI CPI in EU
member states in 2008 was 6,47 which indicates that, generally speaking, EU does not have
efficient anti-corruption mechanisms.
In addition, 8 EU member states (Bulgaria, Greece, Italy, Latvia, Lithuania, Poland, Romania,
Slovakia) have TI CPI in 2008 that is 5 or below 5 which is a serious indication of the status
of state capture.
The projections of the situation after the new „wave“ of accessions give birth to serious
concern. The candidate countries (Croatia and Turkey) and the SAA countries have TI CPI
below 5 and it is highly unlikely this rating will significantly improve before accession. If
these countries were to join EU today, the situation would be as follows.
In 24 out of 34 countries („accessed“ are Turkey, Croatia, Macedonia, Bosnia and
Herzegovina, Serbia, Montenegro and Albania) i.e. in 70,5% the TI CPI would be below 7.
The average TI CPI would be 5,9 and in 15 out of 34 countries the TI CPI would be 5 or
lower – 44% of the states would be close to or in the situation of state capture.
If we compare the TI CPI with the index of economic freedom (created by Heritage
Foundation and Wall Street Journal), we will see that in 95% of countries where the TI CPI is
5 or below 5, the property rights index (created by IPRI) is also very low (below 50). Put
together, these numbers indicate that EU market might become a very unsafe place where
basic preconditions for development (such as property rights) are unstable in almost half of
the EU member states.
In addition to the above arguments, it should also be remembered that the EU bodies are
formed by EU member states where, proportionate to raised level of corruption and increased
number of EU members who are not „corruption free“, it will be a lot more difficult to reach
adequate decisions related to anti-corruption policies.
We can already witness indications of negative trends in EU and other relevant international
bodies' decision making. The Council of Europe has declined the request of three institutions
(Access Info, ARTICLE 19, and the Open Society Justice Initiative) for access to information
about the positions of member states on new legislation regulating access to information and
transparency. As Eva Moraga, Legal Advisor at Access Info has put it: "All messages
conveyed by European institutions about a transparent, open and participatory Europe fail
when these very institutions refuse to give information about the specific positions taken by
each Member State during the decision-making process".
What are the main challenges in EU approach towards anti-corruption?
The main challenge facing the EU is changing the general standpoint that corruption is
„government's problem“ and that it must be the individual governments who take the greatest
part in developing and implementing anti-corruption measures. As professor Alina Mungiu
Pippidi stated during 13th International Anti-Corruption Conference in Athens – expecting
authorities to fight corruption is a contradiction in itself because most often it is precisely the
authorities who present problems, not solutions. Such an approach is also contradictory to
mechanisms developed on the global level, such as UNODC Anti-Corruption Tool Kit and
measures developed by UNCAC that ask for active contribution from civil society and the
media in combating corruption.
The EU decision making structure does not allow civil society organizations battling
corruption to adequately participate in EU decision making processes. This combined with the
overall negative anti-corruption trends in EU member states blocks any proactive anticorruption approach taken on the international level. It also makes the proper assessment of
the overall scope of the problem more difficult.
The lack of political will and the lack of civil society and media participation in the
formulation of a solution to the anti-corruption problem are shown on multiple policy levels –
from EU financing of anti-corruption programs to the negative attitude of individual
governments towards public criticism to the ignoring of citizens reports about the abuse of
power of local politicians, every level of government seems to have the same principle
problem of a lack of political will.
Here is a recent example taken from the observation of the Croatian accession process. The
implementation of efficient anti-corruption policies is one of the main preconditions for
Croatian accession to EU member state status. Even though in 2008 we have witnessed a
rapid escalation of violence towards individuals and organizations fighting corruption (mostly
media and civil society) the Progress Reports 2008 and 2009 for Croatia had more of a
positive than negative tone.
At the same time, administration of the EU funds has been decentralized and entrusted to
Croatian CFCA (Central Financing and Contracting Agency) within the Ministry of Finances.
Even though PHARE 2006 Call for Proposals published in the first half of 2008 specified
following priorities: a) Anticorruption measures, b) Local community mobilization and
organising for solving local problems (especially of marginalized groups), and fostering
dialogue and reconciliation, c) Protection of children’s rights, d) Promotion of gender equality
- out of 13 approved projects not one was primarily focused on anti-corruption. All Croatian
CSO's who predominantly work on anti-corruption (and who successfully applied for EU
projects in the past) did not gain approval for their projects.
Not only has Croatian Government demonstrated the lack of will to tackle corruption, it has
also aggravated the sustainability of anti-corruption NGO's because between the April 2008
and 2010 there have been no other calls for proposals targeting anti-corruption. If we take into
account the above projected negative trends in anti-corruption, the EU might soon face almost
complete lack of anti-corruption capacities and also the lack of adequate anti-corruption
programs which will surely reflect on the overall capacities for sustainable development and
growth.
The sooner the EU tackles this problem the better. Especially so if we remember that
economic and financial crisis will surely aggravate the situation. Comprehensive and
sustainable solutions to combating corruption must be designed and capacities built. Key
actors, such as civil society organizations and the media must be regarded as equal partners in
this effort. The response of the EU bodies should be swift, efficient and sustainable because
threats of loosing capacities as well as civic motivation are already present.
Written by: Munir Podumljak, Partnership for Social Development, June 2010
info@psd.hr