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Transparency Group Says Corruption Undermines Europe's Economic Stability

A trader at the Frankfurt stock exchange watches a news broadcast showing German Chancellor Angela Merkel. (file photo)
A trader at the Frankfurt stock exchange watches a news broadcast showing German Chancellor Angela Merkel. (file photo)
Anticorruption group Transparency International says close relationships between businesses and governments are enabling corruption and undermining economic stability in Europe.

The nongovernmental organization's warning comes in a new report, "Money, Politics And Power: Corruption Risks In Europe," which says "gaps in governance" contributed to financial and political scandals in nearly every European country during 2011.

Political parties, businesses, and civil-service administrations are said to be the weakest players in the fight against corruption across Europe. Public watchdog institutions such as state auditors, ombudsmen, and election commissions performed best.

Transparency International says no European country received a clean bill of health from its corruption "integrity check."

The report notes growing concern among the general public in Europe that corruption is on the rise.

Financial Lessons

The research also concludes that too many governments are still insufficiently accountable for public finances and public contracts.

Paul Zoubkov, a program coordinator at Transparency International who was in charge of preparing the report, says Europe's ongoing financial crisis reveals the price of complacency toward corruption.

In particular, the report places Greece, Italy, Portugal, and Spain -- four countries whose fiscal problems endanger the euro currency -- at the top of the list for "serious deficits in public sector accountability and deep-rooted problems of inefficiency, malpractice, and corruption."

Zoubkov claims the links between corruption and the eurozone crisis can no longer be ignored.

"In order to get out of the euro crisis, it is essential that these gaps in anticorruption defenses are addressed," Zoubkov says. "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."

Zoubkov also says Transparency International has concerns about a "rolling back on positive progress" against corruption in European Union member states that joined the bloc in 2004.

"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," Zoubkov says. "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 -- Slovakia, Hungary, and the Czech Republic -- there are serious issues with political-party funding."

First European Focus

Transparency International's report is part of a pan-European anticorruption initiative that is supported by the European Commission. It also is the nongovernmental group's first systematic assessment of the capacity to fight corruption in 25 European states.

In its recommendations, Transparency International calls on European lawmakers to make lobbying and campaign finance more transparent.

It says 19 out of the 25 European countries it examined have yet to regulate lobbying, and only 10 have banned undisclosed political donations outright.

The report says governments in Europe must impose mandatory regulations on political-party financing -- including clear rules on the disclosure of donations and the closing of loopholes in the law.

It says codes of conduct are needed that provide specific guidance for parliamentarians to deal with ethical dilemmas and conflicts of interest.

It also says a mandatory register of lobbyists is needed in Europe with a "broad definition of lobbyists" that includes public-affairs consultancies, corporate lobbyists, law firms, nongovernmental organizations, and think tanks.

Finally, Transparency International says law must be adopted that protect whistleblowers who reveal corruption in both the public and private sectors.

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