The European Union, Citizens, and Corruption

As head of the rotating presidency of the EU, Hungary will have an opportunity to become an effective champion of good governance and integrity across Europe. The upcoming months of the Hungarian presidency will be critical for advancing the anti-corruption agenda at the level of the Union. This is not a question of narrow political concern. Rather it is about fulfilling the expectations of over three-quarters of the citizens of the EU. It also represents an opportunity for Hungary to make a difference in terms of leadership by offering its full support to policies addressing corruption, one of the most acute public concerns within the Union.

It is common knowledge that corruption undermines good governance, rule of law and fundamental rights, leading to the misallocation of EU resources, harming the private sector, and distorting the EU internal market. However, the EU still does not have a mechanism to assess anti-corruption efforts in its member states, impose measures or verify their implementation. Anti-corruption policy is left with national authorities in the member states on the basis of the principle of subsidiarity. It is high time to change this situation and adopt an anti-corruption policy at the level of the Union itself.

There are strong arguments in favor of this. First, the cost of corruption is very high. For instance, the European Healthcare Fraud and Corruption Network estimated that i56 billion is lost every year to healthcare fraud and corruption in the EU, meaning a loss of at least i150 million per day. In Greece, according to a study conducted by the local chapter of Transparency International, petty administrative corruption amounted to an estimated value of i790 million in 2009. The Italian Court of Auditors reported in 2008 that i60 billion is lost each year to corruption in Italy. A guide on combating corruption in public procurement published by Transparency International in 2006 estimated that losses in the public procurement systems reach 10% of the value of the contracts. One could continue to enumerate such examples, both from new and old member states, but they all point to one conclusion: there is no corruption-free zone in the European Union and consequently any attempt to address corruption must be based on a uniform and integrated approach.

Second, there is considerable pressure for action from EU citizens. Recent data show that people in the EU Member States consider corruption a serious problem and expect the EU institutions and their own governments to do more about it. In a public consultation organized by the European Commission in 2008 on the topic of freedom, security and justice in the EU, 88% of respondents stated that the Union should do more in the fight against corruption. Likewise, the 2009 Eurobarometer showed that 78% of respondents thought that corruption is a major problem in their countries. In December 2009 Transparency International released its 2010 Global Corruption Barometer, which reconfirmed the public opinion trends of recent years: 73% of Europeans feel that corruption increased over the past three years. It is becoming increasingly evident that only an anti-corruption mechanism at the level of the Union will meet the expectations of EU citizens.

The legal basis for an EU anti-corruption mechanism comes from the Treaty of Lisbon. Moreover, the European Commission received an explicit political mandate for action from the European Council through the Stockholm Programme on providing an area of freedom, security and justice for EU citizens. The Stockholm Programme mentions corruption among the threats to the internal security of the Union.

The European Commission currently works on the basis of this political mandate. During a public hearing that I organized on 15 September, 2010 with the support of the European People’s Party Group, Cecilia Malmström, Commissioner for Home Affairs, announced an anti-corruption package to be prepared for 2011. By early December a public consultation on a future reporting and monitoring mechanism on EU Member States’ progress on fighting corruption had already taken place.

Now the European Commission steps well beyond the stage of declarations of intent, as its Work Programme for 2011 includes three concrete policy actions meant to protect the licit economy in the EU: a communication on a comprehensive policy against corruption, a communication on the anti-fraud strategy, and a new legal framework on the confiscation and recovery of illicit assets. The communication on a comprehensive policy against corruption is due by the second quarter of 2011. It will establish an evaluation mechanism to assess anti-corruption efforts in EU Member States and present modalities of cooperation with the Council of Europe’s GRECO (Group of States against Corruption).

Such an evaluation mechanism of anti-corruption policies is necessary and highly overdue. Member States have different approaches and practices with regard to the implementation of anti-corruption measures. In addition, Member States collect very different statistics on corruption that are not comparable across the Union. The resulting fragmentation could have serious consequences going far beyond information gaps, including loopholes that could potentially benefit criminal interests.

Existing monitoring mechanisms such as GRECO cannot replace the EU’s own policy action. GRECO is an institution of the Council of Europe, not the EU.

As the Council of Europe includes states outside the Union, it can neither generate standards for EU Member States nor provide for verification and sanctions in case of non-compliance. The European Union set for itself the goal of acceding to GRECO, but this is something independent of a mechanism that should exist at the EU level and should be adapted to the specific needs of the member states. This is not to deny that GRECO remains a complementary and valuable instrument of regional cooperation that can promote standards of integrity in the wider region, but once corruption is recognized as a problem within the Union the solution should come from the EU itself, and not be externalized to a third-party arrangement.

Taking over the rotating presidency of the EU at a crucial moment for anti-corruption policy constitutes an excellent opportunity for Hungary to set a clear-cut European leadership profile for itself as a champion of good governance.

By supporting an EU-wide anti-corruption mechanism and delivering results under the Stockholm Programme, in the field of justice and home affairs the Hungarian presidency can “bring the European Union closer to its citizens,” which is one of its priorities. Last but not least, it would allow the Fidesz-led centre-right government to pursue its anti-corruption agenda, which was one of its major issues during the last electoral campaign.