Global Policy Forum

By Joshua Gallu

Corruption is rife in Romania and Bulgaria according to a ranking released by Transparency International on Monday. The report makes unwelcome reading for the two Balkan countries ahead of their 2007 EU accession.

At first glance, it looks like a Winter Olympics medal tally. Scandinavian countries Finland, Sweden, Norway and Denmark take up 4 of the top 8 spots, while countries like Chad, Congo, Sudan and Haiti linger at the bottom. But this isn't a game -- it's a ranking of how corrupt your government is. And, if you live in a relatively poor country, the news is not good.

Indeed, the link between corruption and poverty is alive and well. This is the main finding of Transparency International's 2006 Corruption Perceptions Index. The index -- measured on a ten point scale with 10 as least corrupt and 0 as most -- revealed corruption is perceived to be rampant in almost half of the 163 countries studied.

Bad news, worse timing

The rankings cast a spotlight on countries that allow corruption to flourish or just peacefully exist. The spotlight is particularly unwelcome and untimely for some. Take Romania and Bulgaria, for instance. The two Balkan countries are under close scrutiny from the EU for not bringing corruption under control.

Brussels worries that the billions in subsidies set to flow into the countries will end up lining the pockets of officials rather than modernizing the country. Romania -- which ranks 84th on the list -- has been plagued by corruption for years. Bribes are considered commonplace for basic services like health care, and the justice system is weak -- foreign investors complain that contracts and court decisions are not enforced. Bulgaria, meanwhile, ranks 57th.

In a recent interview with the Süddeutsche Zeitung, Romanian Premier Calin Popescu Tariceanu said his country had made progress. "We have formed structures to contol the flow of money in strict accordance with the EU Commission. It is in our own interest to make the best use of this money in a fully transparent way that will be monitored by us and the EU Commission." Nevertheless, Brussels has written a list of safeguards allowing the EU to cut subsidies if they are being siphoned off by the corrupt. The EU Commission released a report in September saying Romania had better make good on its reforms of the justice system and its fight against corruption if it wants the money.

Finding the silver lining

Not all are so pessimistic. Even within Transparency International some say Romania is doing better than the CPI suggests. Mikos Marschall, Transparency International's regional director for Europe and Central Asia, told Spiegel ONLINE that the CPI does not capture the positive reforms Romania has achieved in the past year: "The reality is the country is less corrupt than perceived."

Scoring a 3.1 on a ten-point scale means that corruption in Romania is perceived to be rampant. Marschall said Romania's score is "devastating for a country that will join the EU next year." Still, foreign direct investment has been on the rise in Romania, according to the Economist Intelligence Unit, suggesting businesses find it an increasingly attractive environment to invest in. That, says Marschall, is a result of positive anti-corruption measures the country has taken. In particular, introducing a flat tax has reduced loop holes and red tape.

Romania has its justice minister, Monica Macovei, to thank for some advances, like prosecuting corrupt officials. She hasn't always been successful, though. She and Transparency International both proposed forming an independent agency to crack down on corruption -- the proposal was rejected by parliament. If an anti-corruption agency does come to fruition, it's likely to be window dressing, says Marschall. In other words, there's still a lot of work to be done. Tariceanu affirmed: "I would be lying if I said that corruption was fully stamped out." The rating is a good reminder that Romania still has a long way to go on reforms, and the EU should keep up its support, says Marschall.

Does this mean they aren't ? A comparison with Poland is instructive. With a score of 3.7, Poland ranks worse than Bulgaria and not much better than Romania -- this a country that already receives billions in subsidies. Actually, most of the former communist states that joined in 2004 weren't up to EU standards at the time either. But the economic development and progress those countries have enjoyed since joining the EU is perhaps the strongest argument in favor of Romania and Bulgaria's candidacy.

David Nussbaum, CEO of Transparency International told Spiegel ONLINE that though the countries are making progress, they need pressure to make good on their reform promises: "Romania and Bulgaria are definitely headed in the right direction. Speed of travel? Uncertain."