Report says corruption could weaken Europe

 

POLITICAL AND business corruption in Europe, especially in the Mediterranean, could further weaken vulnerable economies struggling to overcome the euro crisis, according to an international watchdog.

While it sees itself as one of the world’s least corrupt regions, few countries in Europe regulate lobbying or give citizens easy access to public information, allowing a culture of graft to take hold and political and business elites to divert funds, Transparency International said in a report.

Bloated budget deficits and debt are at the heart of the euro zone’s 2½-year-long crisis, while corruption means scarce public money is spent inefficiently and may be creamed off at a time when record unemployment is reducing government revenues.

“Countries with weak anticorruption safeguards are often the ones with most problems in their public debt at the moment,” said Finn Heinrich, research director at Transparency International, who supervised the report across 25 countries.

“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,” he added.

The report names Greece, Italy, Portugal and Spain – the euro zone’s most financially troubled nations – as having deeply rooted problems in their public administration, namely that officials are not accountable for their actions.

Although not technically illegal behaviour, politicians and business leaders use their influence to win contracts and sway policies, while parliaments often fail to enforce the anti-graft laws and rules that exist, the report says.

“The links between corruption and the ongoing financial and fiscal crisis in these countries can no longer be ignored.”

Corruption costs the European Union about €120 billion a year, according to the Strasbourg-based Council of Europe. Many analysts say the figure is probably higher.

Privatisations are fertile ground for creaming off funds into private hands and Transparency International says Portuguese and Greek privatisation programmes could be at risk, potentially leaving less money to pay down debt and deficits.

The perception that governments are too close to business elites added to the public anger that brought thousands of people on to the streets in Madrid and Athens in recent months.

Former Italian prime minister Silvio Berlusconi was dogged by scandal. He faced a bribery case in Milan in February, although it was thrown out by the court and he denies any wrongdoing.

Corruption is notoriously difficult to measure, but 74 per cent of Europeans see it as a growing problem in their countries, according to the EU’s latest Eurobarometer survey.

The European Commission has described corruption as a “disease that destroys a country from within”.

Transparency International says the issue is not limited to the countries of the Mediterranean. Many countries in western and northern Europe do not have dedicated anti-corruption agencies, while wealthy Sweden and Switzerland have no binding rules to regulate private donations to political parties, the report finds.

Regulations in the Netherlands are seen as “wholly inadequate”, the report said, while bans in place on corporate donations in Belgium and France are not effective because funding can be pushed into other “opaque channels”.

Transparency International also says the influence of lobbyists is shrouded in secrecy and the 3,000 lobbying groups in Brussels should be required to sign a single register, rather than a variety of voluntary registers.

“Europeans’ concerns are not with potential police corruption or suchlike,” said Mr Heinrich.

“They view corruption as the close interrelationship between business and the political elite. European leaders don’t take that into account.” – (Reuters)

IRELAND'S RECORD TIME TO CLOSE THE LOOPHOLES

IRELAND IS one of 19 countries yet to regulate lobbying and one of 15 countries that have failed to introduce an outright ban on undisclosed political donations.

It is also singled out in the study as the only country that has introduced excessive fees for freedom of information requests.

Transparency International Ireland says politicians must “curb the influence of powerful interests on politicians by opening lobbying to greater public scrutiny and making political campaign finance more transparent”.

“Ireland’s anti-corruption framework is decidedly patchy, with significant weaknesses that undermine the quality of our democracy and standards of governance,” says Nuala Haughey, Transparency Ireland’s advocacy and research manager.

“On the downside, structural weaknesses in democratic governance mean the executive is not properly held to account by parliament. Policy-making remains shrouded in secrecy and political patronage is alive and well when it comes to appointments to State boards.

“Our ethics watchdog, the Standards in Public Office Commission, is hobbled by weak investigative and sanctioning powers,” Haughey adds, “and political party finance laws are riddled with loopholes – significant corruption risks that draft legislation currently before the Oireachtas does not adequately address.

“The Taoiseach’s election mantra was that he wanted to make Ireland the best small country in the world in which to do business, raise a family and grow old with dignity and respect.

“If he is serious about this, he needs to go beyond austerity policies” to tackle the corruption risks and governance gaps that undermine our economic stability.