SAR representatives Alina Mungiu-Pippidi and Valentina Dimulescu participated in the conference “Understanding Corruption in the EU: the Policy Dimension”, held in Brussels on April 9, 2013 . The meeting was hosted by MEP Franziska Brantner, and attended by MEPs Jens Geier, Eva Joly and Monica Macovei, and focused on topics such as the “Effects of Corruption on Public Budgets, Tax Collection, Employment, Gender Equality, Electoral Turnout and Brain Drain”, as well as “Corruption and EU Funds”. Professor Alina Mungiu-Pippidi launched the discussion paper “The Good, the Bad and the Ugly: Controlling Corruption in the European Union” – which is part of the ANTICORRP research project – and showed which EU member states perform best and worst in controlling corruption and the sectors in which corruption risks are most alarming. The paper recommends reducing administrative resources for corruption and strengthening the constraints by increasing audit capacity, judicial autonomy and the monitoring capacity of civil society.
Concerning the issue of corruption and EU funds, SAR pointed out that Romania not only has the lowest absorption of EU funds of all new member states, but also the worst corruption score in World Bank Control of Corruption.
The amount of money absorbed by the end 2012 was 2 billion Euro (11,47% of the entire financial allocation). Meanwhile, the estimated financial damage due to corruption is 80 million Euro in 2012, which amounts to 3,66% of the sum absorbed, according to data provided by the Fight Against Fraud Department (DLAF). So far, just 1% of the total proceeds have been recovered.
Romania has experienced pre-suspension of funds due to fraud suspicion and lack of adequate management and controls (4 Operational Programs) in 2012, halted reimbursement claims in 2012 for 5 Operational Programs and for 2 Operational Programs in 2011.
While the estimated direct cost of corruption is relatively low, the opportunity cost posed by poor governance is very high.
SAR recommends two main solutions:
1. The development of an early warning mechanism to pre-empt fraud and the suspension of funds;
2. Social accountability designs whereby the control function is shared with local stakeholders at every stage of the projects so as to enhance transparency and control.
SAR’s presentation can be found here.
For more information on the defrauding tactics used in Romania vis-à-vis various European financial instruments, read the recent SAR report entitled “Private firms ‘outshined’ the local authorities in defrauding European funds”.
For more information, please contact Valentina Dimulescu at valentina.dimulescu@sar.org.ro