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EU Commission: Corruption Across EU Costs €120 Billion 196

Posted by Unknown Lamer
from the i'd-like-to-buy-a-law dept.
cold fjord writes with news that the EU has completed its first report on corruption in member states, and the results aren't looking too good. From the article: "'The extent of corruption in Europe is 'breathtaking' and it costs the EU economy at least 120bn euros (£99bn) annually, the European Commission says. EU Home Affairs Commissioner Cecilia Malmstroem has presented a full report on the problem. She said the true cost of corruption was 'probably much higher' than € 120bn. Three-quarters of Europeans surveyed for the Commission study said that corruption was widespread, and more than half said the level had increased. 'The extent of the problem in Europe is breathtaking, although Sweden is among the countries with the least problems,' Ms Malmstroem wrote in Sweden's Goeteborgs-Posten daily. The cost to the EU economy is equivalent to the bloc's annual budget. For the report the Commission studied corruption in all 28 EU member states. The Commission says it is the first time it has done such a survey. "
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EU Commission: Corruption Across EU Costs €120 Billion

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  • by ScottCooperDotNet (929575) on Tuesday February 04, 2014 @01:09AM (#46147395)

    Why are countries most affected by the debt crisis also the most corrupt?

    • by Mashiki (184564)

      You haven't seen corruption until you've done business with China.

      • by jonbryce (703250)

        And corruption in China is absolutely nothing compared to the level of corruption in India.

    • Because those are the countries whose corrupt inefficient systems lead to bad choices?
      Incompetence in doing things like collecting taxes is left to go unchallenged. Money is spent on things that aren't needed because politicians are bribed. Services are unfairly provided due to nepotism.

    • Ahh I didn't know Africa had been decimated by the Sub Prime Market crash!
    • by bazorg (911295)

      If we consider that the questions on the survey were:
      "do you feel that corruption is widespread in your country?"
      and
      "do you feel that corruption affects you personally?"

      then it's an unsurprising result. If people are told their country is corrupt and bankrupt when it is obviously going through a serious crisis, it is easy to believe in that story and perpetuate that perception of a broken country.

  • You gotta add at least one digit to that.

  • by Main Gauche (881147) on Tuesday February 04, 2014 @01:36AM (#46147489)

    120 billion euro? Internets, you so funny.

    To put things in perspective:

    1. Estimates [forbes.com] of just medicare/medicaid fraud in the US easily approach $100 billion. I'd bet those estimates are conservative.

    2. Medicare/medicaid spending is only about a fifth of the US budget. (That doesn't necessarily mean that total US fraud is 5 times the above figure, but suggests it's much larger than $100B.).

    3. The Eurozone's GDP is about equal to (slightly larger than) that of the US.

    Put it all together, and tell me with a straight face that fraud in the Eurozone is 120 billion euro (about $160 billion). Keep in mind that for every Sweden there's an Italy.
    Yeah, it's "probably" much higher, like the Broncos "probably" lost.

    • by Firethorn (177587)

      Keep in mind that for every Sweden there's an Italy.

      Fraud isn't quite corruption, for example taking bribes is a seperate issue from fraud, though often highly related.

      But yes, I'd be shocked if the corruption cost is 'only' 120B Euro for Italy alone.

      • In the case of corruption related to medicare disability fraud, the "fraud" part is the healthy person wanting to be on disability; the "corruption" part is the doctor and/or government agency helping him to do so.

    • The article is about corruption (bribing officials and whatnot) not fraud.

      So, that doesn't really put anything in perspective.

      • by GoodNewsJimDotCom (2244874) on Tuesday February 04, 2014 @02:02AM (#46147565)
        I think Main Gauche is more correct. What you don't see about political corruption is that the losses invest in themselves for more losses down the road. Borrow 1 trillion to stimulate the economy, but you really just paid off your buddies? Well that 1 trillion is gone, but you'll have to pay interest on it constantly. Institute corrupt policies on education, and you reap the losses of having stupider people. Corruption isn't just 100 billion dollar bad. If it was, any steadfast leader would pay it each year to remove it. Corruption is destroy your government, society, and civilization bad, and in the short run people's lives can be ruined.
        • I'm not saying corruption is good, I'm just saying fraud != corruption. Medicare fraud, where bills are issued and paid for services that did not take place, is not the same as corruption. The article cited even mentioned that basically all bills are paid, and that they try to find the fraud after the fact. So, no preferential treatment, no deliberate intervention by officials, not corruption. Not good, but not corruption.

          Also of note, the $130 billion is not the amount of corruption, it is the cost to the

        • by FriendlyLurker (50431) on Tuesday February 04, 2014 @04:46AM (#46147949)

          Corruption isn't just 100 billion dollar bad. If it was, any steadfast leader would pay it each year to remove it. Corruption is destroy your government, society, and civilization bad, and in the short run people's lives can be ruined.

          Exactly. And that is before we factor in the cost in human lives. For example see the incredible increase in suicide rates in Spain in the wake of its scandalous banking and housing corrupticon, wheremajority of the top bankers and politicians [wikipedia.org] have been implicated or sentenced but not jailed in corruption cases.. It got so bad that the bailed out banks were forced to tone down their house repossessions [huffingtonpost.com] as pensioners were leaping from the windows to their deaths when the police came knocking to throw them out into the street. (tone down, not stop).

          Isn't it funny that you almost never see a graphic displaying suicide statistics, especially lately. If there is one statistic a corrupt politician does not want the common folk to see too often, this must be it...

    • by nbauman (624611) on Tuesday February 04, 2014 @05:10AM (#46148023) Homepage Journal

      1. Estimates [forbes.com] of just medicare/medicaid fraud in the US easily approach $100 billion. I'd bet those estimates are conservative.

      According to that link, the GAO estimated $48 billion in "improper payments." I suppose that's "approaching" $100 billion, if you are free to take any number and double it.

      The GAO didn't say "fraud," they said "improper payments." Big difference.

      The author of that article said that Medicare fraud is 10%, but private insurance fraud is only 1.5%. Funny thing, he used to work for the Council for Affordable Health Insurance, which is a private insurance industry lobbyist.

      I went to a doctor about a bad knee. He gave me an x-ray, and billed the insurance company
      $1,000. When I got home, I read a medical journal article about my knee problem. They said that x-rays aren't necessary. I wonder how much the private insurance industry loses to fraud. I'd like a calculation made by somebody who isn't a lobbyist for the private insurance industry.

      • by Walterk (124748)

        It seems fairly easy to figure that out. Take the total health expenditure per capita [wikipedia.org], which for the US according to the OECD was $8508. The second in the list is Norway, with $5669. Norway isn't exactly an ill country, so that leaves $2839 per head (33.38%) unaccounted for.

        If you'd compare it to a purely tax sponsored public system like Britain's NHS, that takes 3405 per capita, which would leave $5103 (or 60%) unaccounted for, somehow soaked up by the insurance industry.

        Enjoy your free market!

        • by nbauman (624611)

          That's a good way of looking at it.

          I used to calculate it like this:

          You pay a dollar premium to an insurance company. They take 15% or 20% of that off the top for administrative costs and profits (that's the item called "loss ratio" in their annual report). The doctor gets 80 cents, and he has to spend another 15 cents for administrative costs, so he's left with 65 cents of your premium dollar.

          The funny thing is that most of that doesn't go to insurance company profits, it goes to administrative costs.

          The o

      • by Kiuas (1084567)

        $1,000. When I got home, I read a medical journal article about my knee problem. They said that x-rays aren't necessary. I wonder how much the private insurance industry loses to fraud. I'd like a calculation made by somebody who isn't a lobbyist for the private insurance industry.

        No, what you'd actually like, is a system of health care in which the price of the simplest medical procedures is not gigantically inflated by profit margins. There is no way an xray costs a thousand dollars.

        I work on the in the h

        • No, what you'd actually like, is a system of health care in which the price of the simplest medical procedures is not gigantically inflated by profit margins. There is no way an xray costs a thousand dollars.

          Keep in mind, that any time you see US medical prices, they are inflated because insurance only pays 33 - 66 cents on the dollar. The hospital charges $1000, but only ends up getting $333 from insurance in most cases to apply to costs, and part of that has to go to helping pay for those that won't or can't pay their own bills.

    • by Anonymous Coward on Tuesday February 04, 2014 @07:00AM (#46148333)

      Keep in mind that for every Sweden there's an Italy.

      As an Italian, I'd like to remind everyone that Italian corruption alone (60bn) accounts for half of the total of Europe losses.
      So the average in Europe is actually much lower than you usually think if you exclude Italy.

      Now we are also risking big fines if we do not pass laws that will fix the situation, but as you can guess, the politicians are not really inclined to do this...
      Everyone is still following berlusconi, who is the father of our new election law (the previous one was ruled unconstitutional), even though he is not in the parliament anymore...

      So actually, comparing the Italian corruption with any first-world country is actually laughable in any case...

      Did I mention the proven interactions between the state and the mafia, or the convicted parliament memebers? Well, we can talk for hours on that...

      • Everyone is still following berlusconi, who is the father of our new election law

        You really shouldn't have thrown *all* your meat hooks away.

      • So actually, comparing the Italian corruption with any first-world country is actually laughable in any case...

        It may not seem that way politically, but Italy nevertheless is a first-world country [wikipedia.org].

    • by GbrDead (702506)

      Eurozone != EU

  • The commision should resign in shame like last time [wikipedia.org]...
  • When you allow Greece and Italy to be part of your organization.

  • 120Billion? (Score:2, Insightful)

    by hackus (159037)

    Try like 38 Trillion if you do a little Math on the LIBOR rigging.

    None of these people EVER go to jail.

    Remember that when you go to get a small business loan and want to work for yourself, instead of going on Welfare and working 50 hour weeks at 4 different jobs.

    Sorry we can't give you a loan, you are not Microsoft, or McDonalds.

    • Shhhhh. Don't you know there is a media ban on talking about the Libor corruption case. Last thing we want is the peasants rising up demanding true never-do-this-again type justice to rein down on those financial big-wigs who perpetrated this theft. I mean, the peasants only got cheated out of their life savings on their home loans it is not like it was a real crime... Oh, look over there Football Champions League, yay!
    • None of these people EVER go to jail.

      Yep don't start a charity start an investment bank and fuck the Economy that way the Government will pay you for receiving you seven figure bonus.

  • Let's see how this plays out....
  • Too much inclusion (Score:3, Insightful)

    by hooiberg (1789158) on Tuesday February 04, 2014 @03:18AM (#46147757)
    That is what happens when the EU keeps including all kinds of countries in south and eastern Europe that do not have their affairs in order. Where human rights are for those who can afford them and where government employees need the extra tidbits to make a living. And north western Europe pays the cost of it.
    • by Xest (935314) on Tuesday February 04, 2014 @04:45AM (#46147947)

      If that's the cost of bringing those nations up to Western European or even Scandinavian standards then what's the problem?

      No one's under any illusion that expansion means bringing countries into the EU with problems, in fact, that's kind of the point. The goal is to sort them out and hence make Europe ever stronger.

      I live in Western Europe, I always have, and I'm happy to pay that cost. It's nice to know we're living on an ever more secure and ever more prosperous continent. Far better than the alternative of having constant repeats of Yugoslavia on our borders over and over and over which cost far more again in terms of military effort to contain or defuse the problem, far higher cost in terms of lives, and far higher cost in terms of ever more desperate people emigrating West trying to escape the war not able to bring anything with them, not even an education, because even their schools had been bombed.

    • by wertigon (1204486)

      In the short term, this is true. Including countries with lesser living standards will cost the EU as a whole.

      In the mid-term (10-25 yrs), these countries will adopt some practices from EU-regulation, get an influx of highly educated workers that start to build up the country, all the while exporting cheap labor (both goods and services meaning immigrants coming to clean your house).

      In the long term (25+ yrs) we will see a strong economic country with high education and living standards. Not including these

  • by YoungManKlaus (2773165) on Tuesday February 04, 2014 @04:43AM (#46147937)

    tons of stuff that is called corruption over here is seen as harmless lobbying and such on the other side of the pond.

  • by Chrisq (894406) on Tuesday February 04, 2014 @04:51AM (#46147963)

    EU Commission: Corruption Across EU Costs €120 Billion

    Swiss banking commission: Corruption Across EU Earns us interest on €100 Billion

  • Great to know corruption costs so much money (as if we didn't know that already)..
    But what are they gonna do about it? I guess the won't as the corruption is in high places and they want to continue receiving their scammoney..

  • by Anonymous Coward

    You do not understand what the European Union is. It is not an economic alliance. It's sole purpose is to prevent large war breaking out in Europe (cue WWI and WW2). Efficiency, anti-corruption, economic competitiveness are all tertiary compared to the great aim of peace, complete with doves carrying olive branches, lions and lambs napping together and whatnot.

    If the EU ever falls apart, Britain, France and Germany will jump at each other's throat, Russia will invade Eastern Europe and the gunpowder barrel

  • TFA says:

    The cost to the EU economy is equivalent to the bloc's annual budget.

    What is this number? It is supposed to compare to 120 bn EUR of corruption, but the sum of EU member states budgets is much much higher. Is it the budget of the EU itself?

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