Corruption in Eastern Europe

Corruption in Eastern Europe

In general, corruption is defined as the abuse of authority for improper gain.

Types of Corruption

There are many types of corruption. For most people, bribery comes first to mind when they hear the word corruption, but other types of corruption include nepotism, fraud and embezzlement.

Bribery: an offer of money or favors to influence a public official.

Nepotism: favoritism shown by public officials to relatives or close friends.

Fraud: cheating the government through deceit.

Embezzlement: Stealing money or other government property.

Perhaps the greatest obstacle to the integration of Eastern Europe into the European Union - but the least discussed - is corruption. The problem is not absent in Western Europe or the EU institutions, of course, but in many parts of Eastern Europe bribery is endemic.

Last studies shows that Bulgaria and Romania are the most corrupted countries from the European Union.

Corruption in Bulgaria

General Political Environment: Bulgaria is a liberal democracy, NATO member, and EU member state. While the country is politically stable, elections typically lead to coalition governments owing to the country's system of proportional representation and numerous parties competing for power.

The July 2009 legislative elections saw a fundamental shift away from both the establishment parties, the BSP and NDSV. The centre-right, pro-European Citizens for European Development of Bulgaria (GERB), led by the popular former mayor of Sofia Boyko Borisov triumphed with 116 seats in the National Assembly. The ultranationalist Ataka party maintained its 9% share of the popular vote, establishing it as potent minority voice in Bulgaria. The GERB holds only a minority position in government but is able to govern with the support of two other right-wing parties. While this presents some risk to government stability, opposition parties remain weak.

The principal goal of the GERB government is to restore good relations with the EU by advancing judicial reforms, targeting corruption and bringing about economic reforms to advance Bulgarian's standard of living. However, its minority position and the strength of lobby groups has hindered the govern- ment's ability to fully move forward with its legislative agenda. In combination with rising unemployment levels and slow progress in tackling graft, opinion polls show declining support levels for GERB.

At the time that Bulgaria joined the EU in 2007, the European Commission (EC) instituted a Cooperation and Verification Mechanism for Romania and Bulgaria as a means to monitor the two countries' progress in dealing with endemic issues of corruption, poor rule of law and, in the case of Bulgaria, the role of organised crime in society. Bulgaria's progress is measured against six benchmarks and it lags particularly in two: high-level corruption and organised crime. This led to the EC's July 2008 decision to freeze €450 million in structural funds earmarked for Bulgaria and in December €220 million of this was withdrawn by the EC over ongoing concerns that EU funds could be employed in corrupt dealings.

Corruption issues have been going on for quite a long time in Bulgaria. However there has been a changing tendency from low-level corruption to hi-level corruption. If the main issues in the early 90`s where highway and city police bribery, nowadays the bribery has moved to the upper level. There have been numerous scandals with police chefs, customs chefs and politicians.

Emilia Maslarova, a social affairs minister in the government of former Socialist Prime Minister Sergey Stanishev, was released on bail for 25,000 euro, an unusually high sum. Together with four other officials, Maslarova was accused of having siphoned 5.5 million euro, the prosecutor's office announced. The sums were related to public procurement for the rehabilitation of a home for elderly people in the city of Stara Zagora, a scheme already dubbed by the public as "the most expensive repair work in history".

The day before, Bulgarian Minister Miroslav Naydenov described the episode as "the biggest theft" of Bulgaria's tormented transition period. The enormous corruption scheme took the form of "swaps" of land and forests, which took place under the past two governments. "The financial losses resulting from the swaps amount to billions, not to mention the damage caused to the ecosystem," said the minister, speaking in Brussels to Dnevnik's correspondent.

More recent scandal is the "Tzankov Kamak" project, where the leader of DPS party (Bulgaria`s ethnic Turkish party) collected a check for over 1 million Euro as a "consultant" of this Hydroelectric Power Plant project. This was an obvious corruption chime of the nearly 430 million euro project.

But these are only the most famous examples recently. There are plenty of business sectors that are directly influence by corrupt bureaucrats. Big and small firms are forced to pay bribes to "small" corrupted agency workers in order to get their requests proceeded correctly. One of the main businesses in Bulgaria, the building construction, is practically operating under constant corruption pressure, which in some cases is "killing" the business.

Adopting more stringent anti-corruption and pro-transparency reforms remain a significant challenge for the country. But on a positive note, the EC's latest progress report for Bulgaria noted a significant improvement in the government's efforts to tackle corruption.

Despite a positive attitude towards foreign investment, foreigners still encounter numerous bureaucratic obstacles when investing in Bulgaria. Corruption and organized crime are the main concerns for investors. Collusion and cooperation between some senior politicians, judges and three organized criminal gangs were alleged in an interior ministry report. When the former government did not pursue the named politicians, the report's author resigned and the issue was dropped by the government. Parliament passed a new investment law in November 2003. The law promotes a level playing field for domestic and foreign investors alike.

Since accession to the EU, Bulgaria has harmonized the majority of its legislation with EU regulatory norms and introduced a more investor-friendly labor law and improved intellectual property legislation and competition law. However, the