Europe's Big Bang sets off corruption fears
And Brussels officials admitted they have no new resources to deal with the new challenges posed by bolting Poland, the Czech Republic, Hungary, Slovenia, Slovakia, Latvia, Lithuania and Estonia onto an already strained vetting and enforcement system.
Ineffective controls?
A spokesman in the Euro capital for the Union's Anti-Fraud Office (OLAF) agreed that the brief would widen dramatically in the wake of the huge expansion to the east. But he added: "There is only so much we can do. We are not a police force."
The task of the office is to police the claims for development and subsidies, especially for agriculture, which will start arriving as soon as the new members are in the club. Fears focus especially on the central farm policy, which has always represented a major attraction for fraudsters (see leading article, page 10). Gregor Kreuzhuber, the spokesman for the EU's farm budget office, conceded little could be done to totally wipe out corruption.
"Once these countries join the EU they will be subject to strict rules, such as spot-checks," he said. "The EU will see how the money is being spent. If there is corruption, then the EU has the right to claw back money."
No shirking
The EU has warned accession countries not to shirk their commitments in reforming their economies and institutions in line with EU law, or face fines, sanctions and even the withdrawal of membership status days before expected entry.
Sceptics are unimpressed. They say that the accession nations will learn fast how to navigate the loopholes of the system, as other members already do. And the EU watchdogs will virtually have their hands tied by bureaucracy and lack of resources. Eastern Europe's appetite for corruption was such that it would be difficult to root out and certainly could put further strain on the already stretched EU budget, warned Władyslaw Bartoszewski, the head of investment banking at ING Bank in Warsaw.
Julia Pitera, the president of anti-corruption campaigners Transparency International in Poland, said the culture of dishonesty "which prevails until today" came from experience under socialism, fed by black marketeering, pilfering and cronyism which all became methods of survival. The extent varied from one country to another. In the three Baltic states, corruption existed on a considerable scale.
"Why? Because the mentality in those countries is quite explicitly different compared to the Czech Republic or Poland," said. "They were under Soviet control but she remained sovereign countries, whereas the Baltic states were effectively absorbed into the Soviet Union."
But progress was being made. In Latvia anyone, including journalists, could now check on the ownership of cars or property on the Internet or in archives as well as find data concerning business activities.
"Thus it is much easier for the press to point out corruption scandals and illegal activities," Pitera said.
She added: "The EU tries to help those countries in fighting corruption, but it's not that easy. The reason is they can't intervene directly and tell us what should be done and force us to do it. But they are forcing the new member states to talk about the problem."
Lack of discretion
Cesar Cordova-Novion, the Paris-based deputy head of the OECD's regulatory reform program, agreed there were challenges, especially in areas such as laws and regulations controlling industry, which "might raise opportunities for corruption and lack of discretion".
"We raised that concern," he said, referring to the problems of the regulatory bodies.
He also said there are issues other countries where people in the industry become employed by the regulatory offices.
"There's vested interest," Cordova-Novion said. "We tried to recommend to increase transparency in the rule-making process.
"If we look to Greece and Spain, we can see how quickly mentalities can change," he said. "Maybe it will require a kind of crisis. We think that there are challenges."
