Corruption in the EU: the high cost of an unresolved problem Damage estimated at €1 trillion

The Italian news outlet Eunews has published an article examining corruption within European Union institutions and its far-reaching economic impact. Caliber.Az republishes the article for its readers. 

It costs a great deal, more than one might imagine. Because it is difficult to quantify and even harder to identify, corruption remains a problem the EU is still unable to resolve. In a working paper on the topic, the European Parliament’s Research Services paints a picture with many grey areas and few certainties. Among the latter are “a broad consensus… on the multifaceted negative economic, social and political impact of corruption,” and the conviction that corruption undermines “the stability of institutions and economic growth, thus posing a direct threat to democracies.”​

It is difficult to quantify the economic damage. An initial estimate from 2016, also carried out by the European Parliament’s Research Services, indicated annual losses of between 179 billion euros and 990 billion euros due to corruption. This discrepancy between the minimum and maximum figures can be explained by the difficulty in quantifying and explaining the phenomenon. As the document notes, “the narrow criminal-law approach associates corruption with a limited number of offences, including active and passive bribery, that is, giving and taking bribes.” However, giving and receiving money “is only one aspect of corruption; therefore, the overall economic and social cost is likely to be bigger.”

Compared with 2016, the situation does not appear to have changed, and two major questions remain: what is meant by corruption, and how much does it cost? There are more up-to-date estimates to answer the second question. The European Parliament’s Research Service now estimates that the total cost of corruption risk in public procurement alone in the EU-27 between 2016 and 2021 was 29.6 billion euros. Meanwhile, during the same period, the total cost of corruption risk in contracts involving EU funds was 4.3 billion euros. A total of 33.9 billion euros, only in these two areas. No other figures are available, confirming that this phenomenon is difficult to keep under control.

Corruption: a problem with many forms

In response to the main question, the document notes that, in addition to the giving and receiving of money, corruption can take on many forms. These include conflicts of interest, where  an individual is able to derive personal benefit from “actions or decisions taken in their official capacity.” Or clientelism, a system of exchanging resources and favours based on a relationship of exploitation between a “patron” and a “client.” Furthermore, corruption can take the form of various forms of favouritism, such as nepotism (where someone in an official position exploits their power and authority to provide a job or a favour to a family member or friend, even if they are not qualified or deserving), clientelism (where a person is selected for a job or a government benefit on the basis of affiliations or connections, and regardless of their qualifications or entitlement); and influence peddling. Then there is the use of personal connections with people in positions of authority to obtain favours or preferential treatment for a third party (a person, institution, or government), usually in exchange for their loyalty or any undue advantage.

Added to the problem of corruption is the inability to address it. The legal framework “remains patchy,” the document laments. The recently adopted 2026 Directive on the fight against corruption seeks to address this by establishing minimum standards at the European level regarding corruption offences, sanctions, and prevention. But it seems the EU still has a long way to go.