Corruption 'at the top' holding back Europe's recovery

Corruption in Europe has exacerbated the economic crisis and continues to hold back growth in nations where confidence in national institutions has been undermined by "integrity gaps", a report by campaign group Transparency International has revealed. Entitled Money, power, politics: corruption risks in Europe, the report documented widespread gaps in governance among European Union member states – especially in the Mediterranean area. Some three quarters of Europeans considered corruption to be a growing problem - according to the research, which was undertaken over a period of two years and included analysis of 300 institutions in 25 countries.

Evaluating the anti-corruption capacity of a range of organisations in the public realm - including political parties, the police, the judiciary, the media and civil society groups – the document highlighted worrying weaknesses across a number of bodies and countries. For example, 19 of the 25 countries surveyed had not yet regulated lobbying and only 10 had banned undisclosed political donations. Four-fifths of the states covered in the report were judged to have presented "obstacles to citizens seeking access to information, while 17 of the countries lacked codes of conduct for their parliamentarians".

Troubled eurozone nations Greece, Italy, Portugal and Spain were named as being among the worst offenders when it came to corruption, a lack of accountability among politicians and officials and deep-rooted problems with their systems of public administration. It is thought that privatisation programmes in these countries were ripe territory for public money being hived off into the hands of politicians and their friends in the business elite – leaving less money to pay down debt and deficits.

Just 12 months ago, the European Commission launched its first anti-corruption policy. But since then, a number of scandals have emerged across Europe - with political leaders facing trials in France and Italy - and governments falling in Latvia, Slovakia and Romania as a result of corruption. Anti-corruption street protests have also been witnessed in many other member states. "Countries with weak anticorruption safeguards are often the ones with most problems in their public debt at the moment," said research director at Transparency International Finn Heinrich. "Audit institutions are particularly weak and often not independent from the government, meaning that public officials probably know they can get away with cutting corners. The links between corruption and the ongoing financial and fiscal crisis in these countries can no longer be ignored. Europeans' concerns are not with potential police corruption or suchlike. They view corruption as the close interrelationship between business and the political elite. European leaders don't take that into account. Governments may not get as much money out of the privatisations as they should because a certain number of people close to private officials benefit rather than the public."

The Council of Europe has estimated that corruption costs the EU somewhere in the region of €120bn a year. And the Eurobarometer survey showed that 74 per cent of EU citizens perceived corruption and a lack of transparency to be a growing problem. Indeed, the absence of transparency and effective accountability regularly features at the top of the list of complaints to the European Ombudsman. Indeed, the European Commission has even labelled corruption as a "disease that destroys a country from within", but the lack of a compulsory register for the 3,000 lobbyists in Brussels also prevented greater transparency – claimed Transparency International. Aside from Mediterranean nations and troubled eurozone states, the report was also critical of Switzerland and Sweden because of their lack of regulations on private donations to political parties.

Meanwhile, laws in the Netherlands were deemed to be "wholly inadequate", and bans on corporate donations in Belgium and France failed to deliver as funding operated in other "opaque channels" instead. The United Kingdom had also suffered from the MPs' expenses scandal, with some parliamentarians being convicted of criminal offences. And in France, only 150 of the 5,000 organisations that met members of parliament during hearings at the Assembly between 2007 and 2010 were registered as interest groups.

According to Transparency International, not a single European country received a clean bill of health – with many governments failing to achieve accountability on budgets and public sector contracts. Programme coordinator at the campaign group Paul Zoubkov said: "In order to get out of the euro crisis, it is essential that these gaps in anticorruption defenses are addressed. In order to move forward and to ensure the sustainability and security of the public purse, it is required that there is full transparency regarding the decisions that are made by the politicians and how the public funds are being spent.

"What we find across the newer member states is that in some countries there has been a rollback in the fight against corruption - including in the Czech Republic, Slovakia and Hungary. In Hungary, we see the issues with the separation of powers. In the Czech Republic, there are particular issues in public procurement. And the same is the case in Slovakia. In all three countries, there are serious issues with political-party funding."

The campaign group called on the EU and its member states to adopt a number of measures to ensure that the lack of transparency and accountability was addressed – in order to appease citizens and to enable Europe to climb out of recession. Demanding better regulation of lobbying and improved transparency on political campaign funding, the report also called for parliamentary codes of conduct across the board to prevent conflicts of interest as well as a law to protect whistleblowers, who reveal corruption whether it be in the public or private sector. Later this year, the European Commission is expected to release its own report on corruption in the EU.

Reacting to the report, Dutch MEP Dennis de Jong - also a member of the European Parliament's Committee on Organised Crime, Corruption and Money Laundering - said the report "screams for action in all institutions and member states", adding: "If the population wants to fight corruption it will be possible for us to help them. We have to help the population fight corruption now and not in the future." And Sabine Zwaenepoel, the deputy head of unit for the fight against organised crime at the commission's home affairs directorate, added: "In the current economic context, the fight against corruption cannot be ignored."

But admitting that there was "huge variation across Europe", Transparency International managing director Cobus de Swardt said that Europe was failing to "tackle corruption at the top" - adding: "There are many examples of robust institutions, but there is room for improvement in every single country. Things that politicians can do would make a real difference. There's no excuse for parliaments and politicians not to clean up their own house and clean it up rapidly. The European parliament should not only demand an increase in accountability in member states, but lead by example."

Chairman of Transparency International Greece Costas Bakouris told the EUobserver website that "corruption created all the elements of the financial problems in Greece", adding: "It has imbued the mentality of the people and the institutions of the country." The campaign group's chief Portugal researcher Louis de Souza claimed that government statements on anti-corruption measures were "bullshit", adding: "It is, in fact, easier to send to jail a retired person who has stolen a packet of rice than a banker who has stolen €3bn. Portugal is a country of black holes in its public accounts and budget slippages at all government levels."

The TI report comes on the day that the European Commission launched its "Transparency portal", which it is claimed will make finding information about EU decision-making "even easier". Commission Vice-President Maroš Sefcovic insisted that the new website would act as a window to make public scrutiny easier and improve citizens' ability to exercise their rights. The online portal aims to deliver quick and direct access to information on legislation, impact assessments, expert groups and advisory committees, consultations, interest representation and lobbying as well as access to documents and recipients of EU funds.

Sefcovic said: "The commission has been in the lead in bringing greater openness and transparency to decision-making in the EU. But we can still improve things further. We have listened to those who use our many transparency tools and a common complaint is that the tools are scattered across the Europa website and are sometimes hard to find. The transparency portal brings all those tools, and lots more information besides, front and centre - where they belong."

Welcoming the commission's new portal, Transparency International said it was a "step in the right direction", but warned "this ease of access needs to be matched by continued improvements in the quantity and quality of the information provided". Going further, director of the Transparency International EU Office Jana Mittermaier said: "The website will help the citizens to access relevant information in a more user-friendly manner. However, we call on the commission to continue improving access to EU documents, the transparency in the spending of EU funds - for example, the naming of all beneficiaries and transparency in expert groups."