NEWS

Corruption a problem inGreece, says World Bank

Et another international report has found Greece to be plagued by corruption comparable in many ways to states in Central Asia. A World Bank report released in late July found that Greek businesses spend about 0.5 percent of their turnover on bribes. Although the survey focused on 27 states in transition (of former communist states), Greece was included along with five other countries in the control group. Carried out in cooperation with the European Bank for Reconstruction and Development (EBRD), the Business Environment and Enterprise Performance Survey (BEEPS), held for the third time since 2000, focused on corruption in the business environment alone. It is quite subjective, since it is based on responses given by businesses to questions regarding their own experience of corruption. In several countries in transition (in Europe and Central Asia), businesses referred to fewer cases of corruption in 2005 than they had three years earlier, confirming trends found in other surveys. In many countries, firms are paying fewer and smaller kickbacks than in the past, and they also see corruption as a smaller obstacle than in the past. Georgia and Slovakia saw the greatest improvements, as well as Romania and Bulgaria, the two countries next in line for European Union membership. The situation has also improved in Moldavia, Tajikistan, Ukraine and Latvia, the latter of which was one of the first states to tackle the problem. However, it is worse in Albania, Serbia-Montenegro (which was still one country when the survey was undertaken) and Kyrgyzstan, with regard to the frequency of bribes. Businesses in Azerbaijan, the Czech Republic and Russia see corruption as a bigger problem now than in 2002. Albania and Kyrgyzstan are still in the worst position, as they were in 2002. Greece was among five countries in Western Europe, as well as Turkey, included in the survey for the first time as a control group. According to the World Bank, the results confirm the overall impression that corruption tends to be worse in countries in transition than in Western Europe, showing that most of these former countries, including the eight new members of the EU, still have a long way to go towards improving their governments’ accountability. However, some other countries, chiefly Greece and occasionally Portugal and Turkey, performed worse than countries in transition. The cost of bribery as a percentage of revenue is higher in Greece than in other Western European countries. As for customs, Greece had the lowest degree of corruption, along with Germany, Ireland and Spain. The worst situation prevails in Albanian customs, where 44 percent of business claimed to have bribed staff. Surprisingly, said the World Bank, Greece is among those countries where corruption among taxation officials is highest, along with Azerbaijan and the three Central Asian republics. The World Bank found that corruption does not affect all businesses in the same way. Most vulnerable are new private, locally owned firms that are likely to be forced to pay out a higher percentage of their turnover and, more often, on kickbacks. Foreign owned businesses and larger firms have less of a problem, as well as state corporations and firms based in small towns or the countryside. Although richer countries have less of a problem with corruption, it is not certain that a high growth rate is the solution, but could exacerbate the problem in the short term, the Bank says. In general terms corruption is on the decline in taxation services, customs and in the licensing of businesses, but not in state supplies or the justice system. Proper planning and decisive reform of institutions Proper planning and reforms have usually helped countries contain corruption, the World Bank said. The greatest improvements have been seen where rules have been simplified, the number of transactions cut between state officials and businesses, and the burden on the private sector also reduced. Not all transactions with the state sector can be removed, but opportunities and incentives for acts of corruption provided by state policy can be predicted and dealt with. For countries in transition, the best carrot is membership in the European Union. However, the World Bank warns that while most countries are striving to stamp out corruption, success at doing so in the short-term does not mean the corruption-free environment will be lasting.