Anti-corruption watchdog Transparency International (TI) says the close relationships between governments and big businesses are enabling corruption and fuelling the eurozone's debt crisis.
"At the end of the day corruption is a moral problem. For example, lobbyists will always meet politicians but the problem comes in when a lobbyist offers a favour and the politician returns that favour…there is a huge difference between promoting a cause and bribing someone."
- Carl Haglund, a member of the European parliament
The warning comes in a new report that says poor governance contributed to financial and political scandals in almost every European country during 2011.
Greece, Italy and Spain are listed as among the most corrupt countries on the continent.
Political parties, businesses and the public sector are said to be the worst institutions for corruption, while electoral commissions and state auditors performed the best.
The report named Greece, Italy, Portugal and Spain – the eurozone's most financially-troubled nations – as having deeply-rooted problems in their public administrations where officials are not accountable for their actions.
Political lobbying is also seen as a major cause for concern. Out of 27 European countries 19 have no regulations on political lobbying.
Party funding, with the influence of lobbyists on decision-makers remaining veiled in secrecy, is seen as ripe for abuse by big businesses. The report says Europe's political parties must do more to make funding transparent.
"Corruption is not the only cause [for Europe's financial crisis but] it is an important contributing factor…In all these areas [mentioned in the report] there is room for making progress but governments need to act quickly before things get worse."
- Chandu Krishnan, the executive director of Transparency International UK
And lastly the report found high levels of corruption in public procurement, where politicians and business leaders use their influence to win contracts and sway policies.
The recommendations TI made to European legislators to counter rising corruption include implementing mandatory regulations on political party funding and a cap on donations; a mandatory register of lobbyists; passing comprehensive laws granting access to information.
In this show Inside Story asks: How corrupt is Europe?
Joining presenter Dareen Abughaida to discuss this are guests: Chandu Krishnan, the executive director of Transparency International UK; Meghnad Desai, an economist and a member of UK's House of Lords; and Carl Haglund, a member of the European parliament.
"Access to the Executive [branch of government] is being sold to businesses, clearly means that they can influence policy…The biggest danger is that businesses can find ways to pass a lot of money to people in government to get their way to bend the rules slightly in their favour."
Meghnad Desai, an economist and a member of UK's House of Lords
CORRUPTION SCANDALS IN EUROPE:
- In Italy, there is the famous corruption scandal of Silvio Berlusconi. The former Italian prime minister has been accused of embezzlement, tax fraud and false accounting along with attempting to bribe a judge. But he has always denied wrongdoing and has never been convicted.
- In Spain, there is the corruption case involving Inaki Urdangarin, the son-in-law of Spain's King Juan Carlos. Urdangarin, the Duke of Palma, along with his business partner, are accused of diverting millions of euros of public money meant for a non-profit organisation they controlled to private offshore accounts. The duke has denied any wrongdoing in the case, which has been a rare embarrassment for the Spanish royal family.
- In Britain, several members of parliament were convicted after it was revealed that they were misusing their expense accounts.