Combating Corruption in the EU – Background for the Round Table June 17 2021

The European Union is under siege from populism, nationalism, corruption, nepotism and opaque links between politicians, industry, oligarchs and financial moguls, all whilst struggling with the challenges caused by the rapid changes of the world power architecture. It is now time for the European Union, its leaders and institutions to show integrity, determination and devotion to protect and fight for the common values and principles laid down in the provisions of the Treaty of the European Union.

Corruption, fraud and money laundering are omnipresent in our societies on all levels. They weaken democracy, the rule of law and the public trust in European Union’s institutions. They make corrupt oligarchs richer and more powerful than ever. Corruption constitutes a threat to security, and facilitates all forms of organised crime. It adversely affects economic growth and international trade, as well as hampering the functioning of the European internal market.

So far, where there have been breaches of law and misconduct by the EU member states the standard reactions have been “diplomatically” well embedded in a number of reports of the European Commission, or countered by weak monitoring mechanisms without evident sanctions, or creation of yet more administrative committees on all levels in all EU institutions, or inconsequential individual follow up actions on highest levels (“behind closed doors”).

Corruption goes hand in hand with autocracy, a diminishing impact of judiciary and parliamentary control as well as the weakening of rule of law in general.

The latest estimates regarding the cost of corruption across the EU sets the loss to GDP somewhere between €179 billion and €950 billion each year. The European Green Party has for several years spent considerable effort collecting, analysing and disclosing data on corruption and the misuse of public funds. The most recent report based on detailed research undertaken by independent sources, as well as by EU institutions, concludes that across the EU member states €904 Billion is lost each year due to corruption, fraud and organised crime.

According to this report the major European champions in corruption are:

Romania 15,6 % of the GDP 38,6 billion € annually
Bulgaria 14% of the GDP 11 Billion € annually
Greece 14% of the GDP 34 Billion € annually
Croatia 13,5 % of the GDP 8,5 billion € annually
Italy 13 % of the GDP 237 Billion € annually
Latvia 13 % of the GDP 3,4 Billion € annually
Slovakia 13 % of the GDP 11 Billion € annually
Poland 12,6 % of the GDP 65,7 Billion € annually
Czech Republic 12 %of the GDP 26,7 Billion € annually

According to reports released by Eurobarometer and various EU sources, 76 % of the population in the EU member states believes that there is wide spread corruption in their country of residence, especially amongst the political parties, governing bodies and institutions in charge of public subsidies.

The 2017 the Eurobarometer report states:

“Corruption undermines citizens’ trust in democratic institutions and the rule of law in particular, as it negatively affects the principles of legality and legal certainty. Tackling corruption can contribute significantly to promoting growth, stimulating competition and investment, and enhancing the beneficial effects of the EU’s internal market. Fighting against corruption is one way in which to enhance mutual trust between the Member States. A strong anti-corruption effort helps to strengthen good governance and democracy and build transparent, effective and accountable institutions. At the same time, such an effort creates an environment which supports investment and boosts entrepreneurship. There is no room for complacency or inaction within the EU.  All Member States, regardless of their levels of corruption, must play an active role in this work together with the European institutions. As emphasised by the European Parliament in its resolutions, there is also a need to ensure the accountability and integrity of the EU institutions. The importance of joint efforts and responsibility in anti-corruption measures cannot be over-stated. The international community has recognised the damaging effects of corruption on economic and social development. In the United Nations 2030 Agenda for Sustainable Development, the aim is to reduce corruption and bribery substantially in all their forms.”

Subsequently, the question must arise as to the efficacy of protective and regulative measures against corruption and fraud provided by EU institutions, such as the EC representations in EU member states (especially where such blatant cases of fraud and corruption continually occur),  OLAF, EUROJUST, EUROPOL, the directorates general of the EC responsible for dispersal of funds, the Budget Control Committee of the European Parliament, the Office of the Ombudsperson and finally the newly created EU Office of the European Prosecutor.

All aforementioned structures are supposed to protect the common good and the integrity of the EU institutions, as well as prevent and fight corruption and the continual misuse of European funds. They must bear responsibility and be held accountable for cementing the systemic weakening of the EU administration by not effectively counteracting fraud, corruption and the misuse of public funds but above all for indirectly contributing to rapidly growing public mistrust in the European project. Many independent observers and insiders are expressing fears that the European Commission is on the way to becoming a secretariat, cash machine and executive agency which is steered by corrupt oligarchs and governmental structures.

The EU Council and the European Commission are well aware of the fact that taxpayers’ money has for years been used in large quantities through fraudulent claims, in order to subsidize national organisations covering activities of leading politicians and their cronies, and/or oligarchs sparking populism and anti-EU sentiments.

Subsequently a considerable number of communications, declarations and legal frameworks have been enacted to fight corruption on the EU and global level, but unfortunately without expected results.

The European Union has a general right to act, by way of setting strong fundamental principles in the field of anti-corruption policies – as defined by the provisions of the Treaty on the Functioning of the European Union (TFEU). Article 67 of the TFEU spells out the Union’s obligation to ensure a high level of security, by way of preventing and combating crime. Article 83 of the TFEU lists corruption as one of the particularly serious cross-border “euro-crime” crimes. Corruption may have adverse effects on the functioning of the internal market, on competition, and on the use of EU resources. It can also be used as a tool for developing networks of organised crime. The Commission has been given a political mandate to fight against corruption and to develop a comprehensive EU anti-corruption policy, in close cooperation with the Council of Europe.

The EU Anti-Corruption Report, published in 2014, provided an important step in drawing attention to the wide spread corruption in the European Union. In spite of the intention to publicise such reports periodically, the European Commission has since failed to publish a further report. As one EC official, informally expressed: “…the issue of corruption is too sensitive for some member states…”

The newly appointed European Commission in 2020 has declared the fight against the corruption as one of its priorities.

Commissioner for Home Affairs, Ylva Johansson, said: “Corruption is a threat to democracy and to the rule of law and it has no place in the EU institutions. By setting out our plans for an anti-corruption review at EU level, we are fulfilling our international commitments and we are strengthening the EU’s role in the global fight against corruption. I am looking forward to the active participation and cooperation of all the EU institutions in this process”.

Commissioner for Justice, Didier Reynders, said: “The fight against corruption is fundamental for upholding the rule of law. This year we presented the first annual Rule of Law report, where the fight against corruption is a key part of the evaluation. This ensures that the fight against corruption will also be a key part of the deepened rule of law dialogue that we are now having at EU and at national level. We are committed to seeing the rule of law upheld in every corner of the EU and we will continue to do the maximum we can to fight corruption.

In spite of the above intentions and policy declarations the EU seems continually to be unable to prevent, combat and effectively sanction against corruption and the misuse of EU funds. It appears to be unable to undertake the necessary organisational, structural and political reforms that are required in order to make the EU administration effective in dealing with such serious crimes.

Public protests against government corruption and misuse of EU subsidies are frequent in different parts of the European Union. Corrupt governments are confronted with growing dissatisfaction and protests by citizens who want transparency and rule of law. Citizens of affected countries are increasingly frustrated by seemingly ineffective support from Brussels and its EU institutions.

Controversy over Policy and Subsidies available under the Common Agricultural Policy (CAP) 2021-2027

The EU’s new strategic agenda for 2019-2024 focuses on protecting citizens and freedoms; developing a strong and vibrant economic base; building a climate neutral, green, fair and social Europe; and promoting European interests and values on the global stage.

However, it is evident from the reports disclosed by NGOs, independent experts, researchers, the European Commission and the European Parliament that the structural funds are systematically and continuously being misused in direct breach of the rule of law and principles of good governance. For more than a decade independent observers, experts and NGOs have reported on corruption, misuse and the fraudulent use of European structural funds; in particular the agricultural and regional development funds.

Leaders of political parties represented in the European parliament tabled fresh proposals to reform the Common Agricultural Policy (CAP), with the aim to strengthen the provisions of the Green Deal and prevent further misuse of EU funds by oligarchs and groups often alleged to be involved in money laundering, corruption and fraud. The CAP provisions from 2021 to 2027 would provide the European member states with a budget of twenty-eight billion euros, apparently without sufficient safeguards to monitor the spending and sanction the misuse of these funds. If this were to happen, the European Commission, under the leadership of Vice President Frans Timmermans, would concede a serious set-back in its ambitious goals defined in the Green Deal and the Paris Climate Agreement, namely to achieve carbon neutrality, protect biodiversity and forests and lead the way to create new sources of renewable energy.

Members of the European Parliament, Greens/EFA recently launched a report called “Where does the EU money go?”, which describes the misuse of European agricultural funds in Central and Eastern Europe. It was launched in order to bring more transparency into the process of negotiating the reform of the Common Agricultural Policy for the years 2021-27. This report highlights the systemic weakness of the European Commission’s management of agricultural funds.

Viola von Cramon MEP, Greens/EFA member of the Budgetary Control Committee, comments:   “The evidence shows that EU agricultural funds are fuelling fraud, corruption and the rise of rich businessmen. Despite numerous investigations, scandals and protests, the Commission seems to be turning a blind eye to the rampant abuse of taxpayer’s money and member states are doing little to address systematic issues. The Common Agricultural Policy simply isn’t working. It provides the wrong incentives for how land is used, which damages the environment and harms local communities. The massive accumulation of land at the expense of the common good is not a sustainable model and it certainly shouldn’t be financed from the EU’s budget.

We cannot continue to allow a situation where EU funds are causing such harm in so many countries. The Commission needs to act, it cannot bury its head in the sand. We need transparency on how and where EU money ends up, the disclosure of the ultimate owners of large agricultural companies and an end to conflicts of interest. The CAP must be reformed just so it works for people and the planet and is ultimately accountable to EU citizens. In the negotiations around the new CAP, the Parliament team must stand firm behind mandatory capping and transparency.”

Mikuláš Peksa, Pirate Party MEP and Greens/EFA Member of the Budgetary Control Committee said: “We have seen in my own country how EU agricultural funds are enriching an entire class of people all the way up to the Prime Minister. There is a systemic lack of transparency in the CAP, both during and after the distribution process. National paying agencies in CEE fail to use clear and objective criteria when selecting beneficiaries and are not publishing all the relevant information on where the money goes. When some data is disclosed, it is often deleted after the mandatory period of two years, making it almost impossible to control.

Transparency, accountability and proper scrutiny are essential to building an agricultural system that works for all, instead of enriching a select few. Unfortunately, data on subsidy recipients are scattered over hundreds of registers, which are mostly not interoperable with the Commission’s fraud detection tools. Not only is it almost impossible for the Commission to identify corruption cases, but it is often unaware of who the final beneficiaries are and how much money they receive. In the ongoing negotiations for the new CAP period, we cannot allow the Member States to continue operating with this lack of transparency and EU oversight.”

The evidence shows that EU agricultural funds are fuelling fraud and corruption. Despite numerous investigations, scandals and protests, the Commission seems to be turning a blind eye to the rampant abuse of taxpayer’s money and member states are doing little to address systematic issues. The Common Agricultural Policy is quite simply in urgent need of revision. It provides damaging incentives for land administration harmful to the environment and local communities. The massive accumulation of land at the expense of the common good is not a sustainable model and it contravenes the provisions and principles set by the Green Deal.

The European Directive on protection of whistle-blowers: an effective tool to combat corruption, fraud and misuse of public funds in Europe?

The newly appointed European Commission has stepped up its campaign to protect freedom of expression and independent and objective reporting on the breaches of rule of law in the member states of the European Union. The new safeguards of the EU are aimed at the protection of investigative journalists, civil servants, courageous citizens exposing publicly corruption, fraud and money laundering in their native countries. Many of them have been subjected to extrajudicial killing, harassment, intimidation, demotion or dismissal. Unfortunately, these crimes continue to persist in the European Union.

After years of debates in the EU Parliament the EU has progressed in setting basic standards for the protection of whistle-blowers in Europe. In 2019, the European Union finally adopted a comprehensive set of principles summarised in the  Directive on Whistle-blower Protection.

This EU Directive has to be seen by all means as considerable progress, setting the minimum standards for the protection of whistle-blowers reporting breaches of EU law and principles, especially on corruption and fraud. Paradoxically, the provisions of this EU Directive do not offer protection for whistle-blowers who are civil servant of the EU institutions, EU agencies, and organisations. The European institutions and agencies keep their own approaches and rules for protection of whistle-blowers. The provisions of these rules and procedures in general grant less protection for whistle-blowers than the EU Directive does. The efforts by the European Ombudsperson to standardise and equalise the safeguards protecting the whistle-blowers in the European institutions and agencies with those defined in the EU Directive have not been so far successful.

OLAF, the EU’s anti-fraud agency, actively encourages citizens to report fraud anonymously on a secured website. The European Commission’s guidelines discourage anonymous reporting and the  European Parliament’s rules advise employees to report anonymously and offer no employment protections to assistants of the MEP’s reporting on breaches of law, fraud and corruption. Subsequently the number of whistle-blowers reporting on corruption, fraud and malpractices in the European institutions over the years is negligible.

Whistle-blowing is increasingly recognised by public opinion in Europe as an important tool in the prevention and detection of corruption, fraud, breaches of rule of law and other malpractice in the public sector. By disclosing grave wrongdoing often linked to misuse of tax payers’ money, whistle-blowers are able to prevent harm done to democracy and safeguard the rule of law. At the same time revelations of clandestine activities by governments, public institutions and organisations may result in serious adverse and existential consequences for whistle-blowers themselves. Safeguarding anonymity is the most important legal tool for protection whistle-blowers from retaliation, unjust punishment and humiliation.

In the absence of sufficient safeguards, whistle-blowers often expose themselves to great personal risks in the interest of public order and rule of law. Whistle-blowing should be regarded as one of the most important and effective tools for the protection of democracy, freedom of expression, human rights and civil liberties. Disclosures of serious breaches of law are effective only in societies with traditionally solid structures of independent justice, making further investigation, prosecution and policy follow up possible. Since corruption and fraud are in principle of a secretive nature, transparency and accountability on all levels are essential.  Consequent legal proceedings against perpetrators, as well as the full and unconditional protection of whistle-blowers, must go hand in hand.

While a number of international conventions promote whistle-blowing as an effective tool for fighting corruption and fraud, many signatory states of such conventions provide weak national provisions for punitive measures for perpetrators and evidently weak safeguards for whistle-blowers. Whistle-blowers in countries with authoritarian governments are in need of increased international and European protection. Investigative journalists, human right activists and their family members in such countries are in need of effective safety granted by the European Union by way of asylum or other appropriate and highly protective measures outside of their country of origin or residence. This aspect of protection of whistle-blowers is unfortunately still not part of the focus of legislators in the European Union.

Whistle-blowing is essential to protect the public interest and prevent further damage done by those accountable for wrongdoing and/or negligence.

Twenty-seven EU Member States have until December 2021 to transpose the Whistle-blower Directive into their national legal systems.  Progress is so far slow and monitoring the transposition has revealed some serious problems. Some EU governments are hesitant to promote more freedom of expression by protecting the disclosure of journalist sources, others are unwilling to accept generally whistle-blowing as a positive impetus for the democracy.

The New EU Policy towards Media Freedom and Pluralism in brief

Media freedom and pluralism are part of the rights and principles enshrined in the European Charter on Fundamental Rights and in the European Convention of Human Rights. Moreover, the Copenhagen criteria for membership in the EU include the existence of guarantees for democracy and human rights. Following that, in its resolutions of 21 May 2013 on the EU Charter: Standard settings for media freedom across the EU, and of 3 May 2018 on media pluralism and media freedom in the European Union, the European Parliament consistently called on the Commission to propose and apply various policies, procedures and mechanisms to safeguard media pluralism and journalists as main relevant actors.

In its 2018 Resolution on Media pluralism and media freedom in the European Union, the European Parliament noted the recent political developments in various Member States that have led to increased pressures on and threats against journalists. Parliament asked the Commission and the Member States to promote and elaborate new socially sustainable economic models aimed at financing and supporting quality and independent journalism. Member States are urged to set up an independent and impartial regulatory body to report violence and threats against journalists and to ensure the protection and safety of journalists at national level, stressing the importance of ensuring efficient legal recourse procedures for journalists whose freedom to work has been threatened, so as to avoid self-censorship. The Commission is invited to propose an anti-SLAPP Directive (strategic lawsuit against public participation) that would protect independent media from vexatious lawsuits aimed at silencing or intimidating them in the EU.

On 19 October 2020, the European Commission presented its 2021 work programme, which included as one of its priorities ‘A New Push for European Democracy’. Under this priority, the Commission announced its intention to issue an initiative against abusive litigation targeting journalists and rights defenders, which is scheduled for the fourth quarter of 2021.

On 25 November 2020, the European Parliament adopted a Resolution on strengthening media freedom: the protection of journalists in Europe, hate speech, disinformation and the role of platforms. In it, the European Parliament condemns the use of SLAPP to silence or intimidate investigative journalists and outlets and create a climate of fear around their reporting of certain topics. It also strongly reiterates its call on the Commission to come forward with a comprehensive proposal for a legislative act aiming to establish minimum standards against SLAPP practises across the EU and to propose an anti-SLAPP directive.

On 3 December 2020, the European Commission presented its Democracy Action Plan to empower citizens and build more resilient democracies across the EU. It is a non-legislative initiative announcing further steps, including legislative ones. Protecting and strengthening European democracy and in particular European elections and combating the threat of disinformation raise challenges that cannot be addressed by national or local action alone. The Plan is centred around the individual rights and freedoms, transparency and accountability and includes the Initiative against abusive litigation targeting journalists and rights defenders as part of it.

Vice-President of the Commission for Values and Transparency, Věra Jourová, said:
“Such initiatives allow journalists from all over Europe to combine their talents and keep us well-informed. The Commission is determined to increase its support for these types of projects and present new initiatives, particularly in order to improve the protection of journalists, in the framework of the European Democracy Action Plan, which will be adopted by the end of the year.”

Commissioner for Internal Market, Thierry Breton, explained:
“We tirelessly stand for independent media and support the initiatives aimed at promoting media freedom and pluralism in Europe. The Commission’s efforts to assist news media in their recovery will be completed by the Media and Audiovisual Action Plan, which will contribute to stimulating their digital transformation in the future.”

Journalists, Parliamentarians and NGOs in Europe have welcomed the new initiative by Vice President Věra Jourová for her supportive action to media freedom and pluralism. The NGOs and the civil society in Europe eagerly look forward to the new plans and proposals which would allow them to work closely with independent media, focusing on critical reporting, transparency and new platforms created for investigative journalism. This is a corner stone for public engagement in fighting corruption, fraud and the misuse of taxpayers’ money in Europe. It is imperative that at this stage the allocation of €61 million for media pluralism be awarded in a transparent way without heavy bureaucratic procedures. Furthermore, it is imperative that the budget of this multiannual programme be substantially increased in the coming years.

Critical and objective journalism, investigative journalism, as well as local and national press in a number of countries are under severe pressure and need transnational European support by the European Union. The world index, carefully compiled each year by the Reporters without Borders, monitors freedom of press in terms of pluralism, independence, legislative framework, abuses, attacks against journalists and reporters. It rated at least a quarter of EU member States as grossly violating these principles. Judicial cases into wide scale harassment and the killing of journalists reporting on corruption and misuse of EU funds by governments and oligarchs in EU member states during the past years are still not being terminated with clear verdicts, clear indictments and the appropriate sanctions. The institutions of the European Union currently play a minor if not totally marginal role in defending free independent press and journalists in the member states of the European Union. This is something that the new EU policies must change.

Despite the fact that freedom of press is guaranteed by all EU Member States’ constitutions, some governments have curtailed this fundamental freedom by getting control over the media and using them as an instrument for political pressure and manipulation of public opinion. Whereas the situation is more critical in some European countries, the majority of EU member countries, even those with a high degree of freedom of press, need to be carefully monitored as well.

Is the European Commissions’ new EU Democracy Action Plan – envisaging a 61 million euro budget made available for protecting free press – going to effectively prevent curtailment of and pressure on independent journalism and protect journalists in the European Union who are investigating corruption, misuse of funds and political power? Is the recent report by the EC reviewing the rule of law, independence of judiciary and freedom of press in the 27 EU member states the right tool in both form and quality for decision makers?

Vice-President for Values and Transparency, Věra Jourová, said: “Democracy cannot be taken for granted; it needs to be nurtured and protected. Our plan aims at protecting and promoting meaningful participation of citizens, empowering them to make their choices in the public space freely, without manipulation. We need to update the rules to harness the opportunities and challenges of the digital age.”


Useful links on EU Policy

Further Reading:




This European Democracy Action Plan, taken together with the new European rule of law mechanism, the new Strategy to strengthen the application of the Charter of Fundamental Rights, Media and Audiovisual Action Plan as well as the package of measures taken to promote and protect equality across the EU, will be a key driver for the new push for European democracy to face the challenges of the digital age. The commitment to democracy is also embedded in the EU’s external action, and a central pillar of its work with accession and neighbourhood countries.

The European Democracy Action Plans is one of the major initiatives of the Commission’s Work Programme for 2020, announced in in the Political Guidelines of President von der Leyen.