Close Links Between Business and Government Pose Risks in Europe

Anti-corruption group Transparency International today warned in a new report that the close relationship between business and government has enabled corruption and undermined economic stability in Europe. The report highlights the gaps in governance that contributed to the financial and political scandals that dogged nearly every European country in the last year. Transparency International called on lawmakers to make lobbying and campaign finance more transparent.

The report Money, Politics and Power: Corruption Risks in Europe highlights a deficit of transparency in the way decisions are made and political groups funded. 19 of the 25 countries surveyed have yet to regulate lobbying, and only ten ban undisclosed political donations outright. “Across Europe, many of the institutions that define a democracy and enable a country to stop corruption are weaker than often assumed. This report raises troubling issues at a time when transparent leadership is needed as Europe tries to resolve its economic crisis,” said Cobus de Swardt, Managing Director of Transparency International.

Three quarters of Europeans view corruption as a growing problem in their country, according to European Union surveys. The last year saw high profile corruption trials in France and Italy.

Political corruption scandals involved MP expenses (UK), pension fraud (Norway), patronage (Czech Republic, Romania) and conflicts of interest (Bulgaria, Finland, Slovenia). Today’s report is the first comprehensive assessment of the capacity of European countries to fight corruption, investigating more than 300 national institutions across 25 states.

Political parties, business and the civil service performed the worst in the fight against graft and wrongdoing, while state auditors, ombudsmen and agencies tasked with running elections were the best performers. The report also found that Europe enjoys strong and well developed legal systems.

Too many governments are not accountable enough for public finances and public contracts, the latter worth €1.8 trillion in the EU each year. Even worse, only two countries really adequately protect whistleblowers from retaliation should they decide to speak out against suspected crime or other unethical conduct.

With strong watchdogs, auditors, justice systems and law enforcement agencies, Denmark,
Norway and Sweden are best protected against corruption. That said, even in these countries some issues remain, particularly in the area of political finance.

Europe’s other corruption risks include:

  • 12 countries have no ceiling on political donations by individuals,
  • 17 countries lack codes of conduct for parliamentarians, while their public disclosure of interests and assets is limited in 11.
  • There are barriers for people who want to access public information in 20 countries.

European governments should close these loopholes, Transparency International said. Transparency International also called on the EU to set an example by adopting robust rules inside its own institutions.

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