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Cecilia Malmström

Member of the European Commission responsible for Home Affairs

Anti-corruption policy in the EU, the way forward

EP Public Hearing : EU Anti-corruption policy for sustainable future

Brussels, 15 September 2010

I am very pleased to have the opportunity to speak to you at this flagship event on fighting corruption in the EU. Allow me first and foremost to thank the European Parliament – and MEP Macovei in particular– for your support in bringing the fight against corruption to the top of the Union's political agenda.

The EPs Declaration of 18 May 2010 on the Union's efforts in combating corruption showed that this House is fully behind the Commission's plan to implement the Stockholm Programme's priorities on fighting corruption. The Stockholm Programme recognised, in no uncertain terms, that

"Prosecution of tax evasion and private corruption must be improved." (…)

"The Union must (…) set objectives on transparency and the fight against corruption [and] "devote" increased attention (…) to anti-corruption measures in a number of areas"

It also called for "developing indicators to measure efforts in the fight against corruption."

It its Stockholm Action Plan, the Commission translated this into a more operational activity, to be ready in 2011, namely:

"A Communication on a comprehensive policy against corruption in Member States, including the establishment of an evaluation mechanism as well as presenting modalities of cooperation with the Council of Europe’s Group of States against Corruption (GRECO) for that purpose".

As good and quickly seldom meet, and recognising both the urgency and sensitivity of this issue, I have insisted on a careful preparation. The Commission services have, therefore, conducted a comprehensive study on the best to take forward the call in the Stockholm Programme and the request of the European Parliament for action. That study is now ready. It provides solid evidence that effective action at EU level is needed. It also gives us a better idea of the impact of possible options and – importantly – the obstacles we are likely to face in shaping a genuine EU anti-corruption policy.

Let me disclose some findings that may be of interest to you. Essentially, we have identified five key problems that need to be addressed:

  • Problem 1: Despite existing EU legislation and (international) monitoring mechanisms corruption remains a serious problem in the EU

  • Clearly, the levels and forms of corruption vary from one Member State to another. But the available research gives no reason to think that there is any corruption-free zone in Europe. And, what is worse, all evidence suggests that corruption is on the rise or, at best stagnating, in the EU as a whole.

In Transparency International’s 2009 corruption index, which measures perceived levels of public-sector corruption, eight EU MS out of 27 (which is over one third!) are scoring only 5 points out of 10 or less. This is an indication of widespread corruption. In fact, the EU-27 average score is 6.4 which places the EU below 30 other countries globally perceived to be less corrupt.

This was also confirmed by the Commission's 2009 Eurobarometer survey. There, more than three quarters of the interviewed Europeans stated that corruption was a major problem for their country (78%). In fact, four out of ten “totally agreed”, and only 19% of respondents disagreed. These results were slightly higher than in Autumn 2007, when 75% of interviewed felt that corruption was a major problem.

  • Problem 2: corruption carries high costs for the economy

  • Indeed, corruption costs money, a lot of money! It causes harm to the state budget and thus to taxpayers - in fact to all of us. A systematic and reliable calculation of the harm caused by corruption in the EU as a whole does not exist yet. Inevitably, hard evidence is difficult to come by, but let me cite just a few telling figures:

  • Studies undertaken in the European healthcare sector showed that approximately 56 billion euro are lost annually (or 108 million euro per day) to fraud and corruption within the EU.

  • A 2005 study conducted by the World Bank for the Romanian Ministry of Health concluded that so-called informal payments from citizens to receive medical care amount to 275 million euro annually.

  • In Italy, a 2008 report of the Court of Auditors pointed out that the total costs of corruption for citizens amount to 60 billion euro each year.

  • Estimates undertaken by Transparency International in Greece indicate that the costs of petty corruption in the year 2009 were 787 million euro (both in the public and private sector), which is an increase of 39 million euro since 2008.

  • According to a Bulgarian Corruption Monitoring System run by the Sofia-based Centre for the Study of Democracy, the total annual losses due to public procurement misappropriations for the 2007–2008 period have amounted to 700 million euro.

Linked to this, a recent study1 commissioned by my services documented the strong link between organised crime and corruption within the EU. Criminals use corruption to penetrate the legal economy, and to undermine law enforcement, the judiciary and public decision-making at all levels.

  • Problem 3: anti-corruption policies vary greatly amongst Member States

At present, the EU does not have a genuine common policy against corruption. The EU Member States have developed different forms of anti-corruption tools and do not engage in the fight against corruption to quite the same extent. Approaches in the Member States vary in several respects: national (criminal) laws differ substantially as do prevention programmes, law enforcement measures, and institutional arrangements.

Some of the national anti-corruption policies work better than others, but Member States are not necessarily informed about each other's successes and failures. There is clearly room for more peer learning and exchange of best practices.

  • Problem 4: EU and international anti-corruption legislation is not fully implemented in the Member States

In fact, there are several problems.

On the one hand, there are proven shortcomings in the transposition of relevant EU anti-corruption legislation. Our 2007 implementation report on the Council Framework Decision of 2003 on combating corruption in the private sector found the transposition of this instrument to be at an early stage among Member States. We are preparing a second report on this, for 2011. Unfortunately, it appears that the quality of implementation is still uneven.

On the other hand, there are shortcomings related to international legal instruments which are not ratified or applied in all Member States. To give an example the UN Convention Against Corruption has not yet been ratified by all EU Member States.

  • Problem 5: Last but not least, corruption undermines the confidence of EU citizens in public institutions and in the fair functioning of the market

It is striking to note that the majority of Europeans interviewed in the 2009 Eurobarometer survey stated that corruption is a problem in institutions at every level of government.

Eight out of ten respondents agreed that there is corruption in their local (81%), regional (81%) and national (83%) institutions. A majority also thought that there are too few criminal prosecutions to deter corruption in the Member States.

These findings point to a fundamental lack of trust in anti-corruption policies. At the same time, they should not come as a surprise. Commission services are responding on a daily basis to complaints from EU citizens who encountered corrupt practices in their dealings with the public services or the private sector in their country. Many citizens appear to have lost trust in their country's institutions or lack information about anti-corruption complaint mechanisms at national level. Therefore the effectiveness of anti-corruption measures is often perceived as low.

In addition, in the last few years there have been high profile corruption cases in a number of Member States and to add to all that, during the same period Europe has experienced a period of economic upheaval as a result of the global financial crisis. The impact of this crisis on the European economy is still being felt across Europe, and has put additional pressure on Europeans and their governments as they work to restore national economies.

It remains unclear to what extent corruption played a role in the origins and development of the financial crisis. But a strong public opinion is forming that corruption, lack of transparency and trading of influence did at least aggravate the crisis. A sustainable answer to financial and economic challenges will also have to include enhanced transparency, accountability and a firm stance against corruption in order to restore trust and confidence.

In any case, what is a consequence of greed and irresponsibility on the part of some should not become our collective failure as the EU. It is therefore time to act!

So, let me outline the next steps.

The evidence collected so far will be the basis of an impact assessment to be completed by the Commission this year. Further stakeholder consultations will be conducted in parallel. A short on-line questionnaire will soon be available on the website of the Commission (DG HOME) as well as on the 'Your Voice in Europe' portal. The answers we are hoping to gather will test the support for the future policy initiatives.

Based on all that, I aim to produce an anti-corruption "package" early next year. That package should contain an update of the Commission's Communication of 2003 on a comprehensive EU anti-corruption policy, an implementation report of the Framework decision on corruption in the private sector, a roadmap for the EU's accession to GRECO (The Council of Europe anti-corruption monitoring mechanism) and, most probably, a new Commission reporting mechanism on fighting corruption in the EU 27.

The precise shape of such a reporting mechanism still has to be worked out, and it will be the subject of hard work over the coming months. However, periodic evaluations and peer learning have already brought tangible benefits in other policy areas, and I have every intention of drawing on those examples. The proof of the pudding remains of course in its eating, I am convinced that using the political leverage of the EU, whilst seeking synergies with existing anti-corruption monitoring mechanisms, will have a real impact.

Developing and implementing a solid Commission reporting system will be a challenge. We will have to overcome resistance and convincingly justify the road chosen. But, where there is a will there is a way, and in this particular case, I would even add: where there is a political will, there is a way.

I therefore will continue to rely upon the Parliament's political support in making stakeholders and Member States aware that, ultimately, we are responding to European citizens' expectations and are acting for the benefit of a more honest, a more transparent and a more prosperous Europe.

Thank you

1 :

The study to examine the links between organised Crime and Corruption commissioned by DG HOME (ISEC) and conducted by the Centre for the Study of Democracy based in Sofia, Bulgaria. 2010.

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