Corruption costs the European Union (EU) between 179 billion and 990 billion euros a year, according to a study by research consultancy RAND Corporation.
These figures are way higher than the estimate of 120bn euros included in the 2014 EU Anti-corruption Report (ACR). That’s because because the estimate in the EU ACR does not account for the indirect effects of corruption (it looks at costs in terms of lost tax revenues and foreign investment due to corruption).
The authors, including a British long-time counter-fraud academic Prof Mike Levi, say that the EU should establish a European Public Prosecutors’ Office, to assist the European Commission Anti-Fraud Office (OLAF) in investigating corruption. The report also calls on the EU to make a EU-wide procurement system.
Corruption in the EU has significant social costs and political costs. Corruption is associated with more unequal societies, higher levels of organised crime, weaker rule of law, reduced voter turnout in national parliamentary elections and lower trust in EU institutions.
The cost of corruption risk in EU public procurement is around five billion euros a year. The costs of corruption in public procurement vary considerably between countries. This estimate is slightly higher than the estimate provided by a previous, large study. This could be because the RAND estimate includes all sectors of public procurement and all EU members, whereas the previous estimate included eight member states and five sectors.
For the full 157-page report visit http://www.europarl.europa.eu/.
