Combating Corruption In The EU
Background For The Round Table June 18 2021
The European Union is under siege from populism, nationalism, corruption, nepotism and opaque links between politicians, industry, oligarchs and financial moguls, all whilst struggling with the challenges caused by the rapid changes of the world power architecture. It is now time for the European Union, its leaders and institutions to show integrity, determination and devotion to protect and fight for the common values and principles laid down in the provisions of the Treaty of the European Union.
On 18th June 2021 from 2pm to 4pm CET the CEIPA video conference – “Corruption Inside-out – Fraud, bribery, and misuse of EU funds: a call for transparency, accountability, proper scrutiny and sanctions” will take place via Zoom. A lively debate with policymakers, researchers, NGO’s and journalists about current anti-fraud schemes and the call for transparency, accountability, proper scrutiny and sanctions.
Corruption, fraud and money laundering are omnipresent in our societies on all levels. They weaken democracy, the rule of law and the public trust in European Union’s institutions. They make corrupt oligarchs richer and more powerful than ever. Corruption constitutes a threat to security, and facilitates all forms of organised crime. It adversely affects economic growth and international trade, as well as hampering the functioning of the European internal market.
So far, where there have been breaches of law and misconduct by the EU member states the standard reactions have been “diplomatically” well embedded in a number of reports of the European Commission, or countered by weak monitoring mechanisms without evident sanctions, or creation of yet more administrative committees on all levels in all EU institutions, or inconsequential individual follow up actions on highest levels (“behind closed doors”).
Corruption goes hand in hand with autocracy, a diminishing impact of judiciary and parliamentary control as well as the weakening of rule of law in general.
The latest estimates regarding the cost of corruption across the EU sets the loss to GDP somewhere between €179 billion and €950 billion each year. The European Green Party has for several years spent considerable effort collecting, analysing and disclosing data on corruption and the misuse of public funds. The most recent report based on detailed research undertaken by independent sources, as well as by EU institutions, concludes that across the EU member states €904 Billion is lost each year due to corruption, fraud and organised crime.
According to this report the major European champions in corruption are:
Romania 15,6 % of the GDP 38,6 billion € annually
Bulgaria 14% of the GDP 11 Billion € annually
Greece 14% of the GDP 34 Billion € annually
Croatia 13,5 % of the GDP 8,5 billion € annually
Italy 13 % of the GDP 237 Billion € annually
Latvia 13 % of the GDP 3,4 Billion € annually
Slovakia 13 % of the GDP 11 Billion € annually
Poland 12,6 % of the GDP 65,7 Billion € annually
Czech Republic 12 %of the GDP 26,7 Billion € annually
According to reports released by Eurobarometer and various EU sources, 76 % of the population in the EU member states believes that there is wide spread corruption in their country of residence, especially amongst the political parties, governing bodies and institutions in charge of public subsidies.
The 2017 the Eurobarometer report states:
“Corruption undermines citizens’ trust in democratic institutions and the rule of law in particular, as it negatively affects the principles of legality and legal certainty. Tackling corruption can contribute significantly to promoting growth, stimulating competition and investment, and enhancing the beneficial effects of the EU’s internal market. Fighting against corruption is one way in which to enhance mutual trust between the Member States. A strong anti-corruption effort helps to strengthen good governance and democracy and build transparent, effective and accountable institutions. At the same time, such an effort creates an environment which supports investment and boosts entrepreneurship. There is no room for complacency or inaction within the EU. All Member States, regardless of their levels of corruption, must play an active role in this work together with the European institutions. As emphasised by the European Parliament in its resolutions, there is also a need to ensure the accountability and integrity of the EU institutions. The importance of joint efforts and responsibility in anti-corruption measures cannot be over-stated. The international community has recognised the damaging effects of corruption on economic and social development. In the United Nations 2030 Agenda for Sustainable Development, the aim is to reduce corruption and bribery substantially in all their forms.”
Subsequently, the question must arise as to the efficacy of protective and regulative measures against corruption and fraud provided by EU institutions, such as the EC representations in EU member states (especially where such blatant cases of fraud and corruption continually occur), OLAF, EUROJUST, EUROPOL, the directorates general of the EC responsible for dispersal of funds, the Budget Control Committee of the European Parliament, the Office of the Ombudsperson and finally the newly created EU Office of the European Prosecutor.
All aforementioned structures are supposed to protect the common good and the integrity of the EU institutions, as well as prevent and fight corruption and the continual misuse of European funds. They must bear responsibility and be held accountable for cementing the systemic weakening of the EU administration by not effectively counteracting fraud, corruption and the misuse of public funds but above all for indirectly contributing to rapidly growing public mistrust in the European project. Many independent observers and insiders are expressing fears that the European Commission is on the way to becoming a secretariat, cash machine and executive agency which is steered by corrupt oligarchs and governmental structures.
The EU Council and the European Commission are well aware of the fact that taxpayers’ money has for years been used in large quantities through fraudulent claims, in order to subsidize national organisations covering activities of leading politicians and their cronies, and/or oligarchs sparking populism and anti-EU sentiments.
Subsequently a considerable number of communications, declarations and legal frameworks have been enacted to fight corruption on the EU and global level, but unfortunately without expected results.
The European Union has a general right to act, by way of setting strong fundamental principles in the field of anti-corruption policies – as defined by the provisions of the Treaty on the Functioning of the European Union (TFEU). Article 67 of the TFEU spells out the Union’s obligation to ensure a high level of security, by way of preventing and combating crime. Article 83 of the TFEU lists corruption as one of the particularly serious cross-border “euro-crime” crimes. Corruption may have adverse effects on the functioning of the internal market, on competition, and on the use of EU resources. It can also be used as a tool for developing networks of organised crime. The Commission has been given a political mandate to fight against corruption and to develop a comprehensive EU anti-corruption policy, in close cooperation with the Council of Europe.
The EU Anti-Corruption Report, published in 2014, provided an important step in drawing attention to the wide spread corruption in the European Union. In spite of the intention to publicise such reports periodically, the European Commission has since failed to publish a further report. As one EC official, informally expressed: “…the issue of corruption is too sensitive for some member states…”
The newly appointed European Commission in 2020 has declared the fight against the corruption as one of its priorities.
Commissioner for Home Affairs, Ylva Johansson, said: “Corruption is a threat to democracy and to the rule of law and it has no place in the EU institutions. By setting out our plans for an anti-corruption review at EU level, we are fulfilling our international commitments and we are strengthening the EU’s role in the global fight against corruption. I am looking forward to the active participation and cooperation of all the EU institutions in this process”.
Commissioner for Justice, Didier Reynders, said: “The fight against corruption is fundamental for upholding the rule of law. This year we presented the first annual Rule of Law report, where the fight against corruption is a key part of the evaluation. This ensures that the fight against corruption will also be a key part of the deepened rule of law dialogue that we are now having at EU and at national level. We are committed to seeing the rule of law upheld in every corner of the EU and we will continue to do the maximum we can to fight corruption.”
In spite of the above intentions and policy declarations the EU seems continually to be unable to prevent, combat and effectively sanction against corruption and the misuse of EU funds. It appears to be unable to undertake the necessary organisational, structural and political reforms that are required in order to make the EU administration effective in dealing with such serious crimes.
Public protests against government corruption and misuse of EU subsidies are frequent in different parts of the European Union. Corrupt governments are confronted with growing dissatisfaction and protests by citizens who want transparency and rule of law. Citizens of affected countries are increasingly frustrated by seemingly ineffective support from Brussels and its EU institutions.
*The European Democracy Action Plan, taken together with the new European rule of law mechanism, the new Strategy to strengthen the application of the Charter of Fundamental Rights, Media and Audiovisual Action Plan as well as the package of measures taken to promote and protect equality across the EU, will be a key driver for the new push for European democracy to face the challenges of the digital age. The commitment to democracy is also embedded in the EU’s external action, and a central pillar of its work with accession and neighbourhood countries.
The European Democracy Action Plans is one of the major initiatives of the Commission’s Work Programme for 2020, announced in in the Political Guidelines of President von der Leyen.