The Greens in the EP tweeted on the 9th of December that € 904 billion are lost to corruption every year in the EU. It actually depends on how the cost of corruption is measured but the figure is mostly true.
The political alliance in the European Parliament Greens/EFA estimated the cost of corruption in the EU to € 904 billion a year. A figure that they shared via their twitter account “Greens in the EP”.
To explain it, they link their new report, entitled “The costs of corruption across the EU”, in their tweet. It details the cost of corruption for every EU country and what could be done if that money was invested in public sectors instead. This report states that between € 179 billion and € 990 billion are lost to corruption every year. But there is no trace of the € 904 billion figure in that report.
The report of the Greens actually links to the RAND study “The Cost of Non-Europe in the area of Organised Crime and Corruption”, ordered by the European Parliamentary Research Service (EPRS) in 2016. This research paper has analysed and calculated what are the impacts of corruption in the European Union, from an economic point of view.
Since the way to calculate corruption depends on which factors are taken into account, the RAND study has made three different scenarios to estimate the costs of corruption in the EU. “Each estimate is based on a different set of assumptions about the size of reductions in the level of corruption that are feasible for Member States in the short, medium and long-term,” explains the research paper. Depending on the scenario chosen, the RAND paper states that corruption costs between € 179 billion and € 990 billion to the EU every year. These are the amounts also stated in the Greens report.
The “magnificent seven”
Contacted via email, the Greens/EFA explained that to have a more precise figure, they decided to base their report on the first scenario, called “The magnificent seven”. This scenario is also the one privileged by the RAND paper, since it “reflects best what can and should be achieved in terms of reducing corruption levels within the EU”. It compares the level of corruption of each EU country to the level of corruption of the seven best performing EU countries.
“The three scenarios produce different results depending on the perception corruption index used (CPI, COC, or ICRG). We have decided to use the CPI index, created by the NGO Transparency International, which focuses on corruption in the public sector, or corruption that involves public officials, civil servants or politicians”, the Greens/EFA underline.
They also precise: “Under scenario 1, data for all countries except Denmark, Finland and Sweden were available. For these three countries, figures had to be drawn from scenario 3, called “Goodfellas”.”
By adding up the values available for every EU country under the CPI index, and under scenario 1 and 3, the Greens in the EP reached the amount of 1.005.070.591.830 US dollars. This sum was then converted into euros with the exchange rate of 0.9 (advised by the RAND report). The exact final sum is therefore of € 904.563.532.649. This calculation has been checked and proven exact by Euroscope team.
However, as explained above, the Greens/EFA made a lot of choices to find out the figure of € 904 billion. By considering other scenarios or others index, the final amount would be totally different. For instance, the World Bank estimate the cost of corruption up to $ 1 trillion a year.
The figure of € 904 billion is true under the estimate and index considered by the Greens/EFA. However, corruption can be measured using a lot of different indicators and index, producing a lot of different true figures.
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