Greece: The cost of a bribe

Greece: The cost of a bribe

The Greek debt crisis has left many of its citizens on the margins, presenting one of the greatest socio-economic upheavals in the nation’s recent history.

With the effects of the crisis endemic and no immediate end in sight, it is important to understand some of the underlying causes of the failure, especially corruption. Petty corruption cost Greece €554 million in 2011, according to the 2011 National Survey on Corruption in Greece. This is €78 million less than in 2010.

To get to the bottom of corruption, Transparency International analyses a range of critical societal institutions (such as the business, media or political parties) and assesses their ability to prevent corruption. This ‘national integrity system’ assessment has been carried out in more than 70 countries worldwide, with 25 of the studies recently completed or being finalised across Europe.

The Greece report finds that several “pillars” of the Greek anti‐corruption system have fundamental flaws, the most significant of which is a crisis of values, typified by broad scale acceptance of and participation in corruption.

Transparency International blogs from the launch of the report.

Crisis of values – corruption in daily life

A key conclusion of the report is that corruption in Greece originates mainly from a crisis of values, which has imbued both the Greek mentality and the core institutions of the country. The long-standing acceptance of corruption by Greek citizens, coupled with fatalism about the chances of preventing or resisting it, drives petty wrongdoing and perpetuates the bottlenecks in institutions that hamper reform.

Corruption played a massive role in this financial calamity, and remains a key concern for the country in the years ahead.

Whether it is awarding a public tender, issuing a building permit or inspecting a construction site, office or restaurant, six Greeks in ten expect public officials to abuse their position for personal gain.

€1406 – the average price of a bribe in Greece

Corruption pricelist 2011
    Type of Service From Up to
Public Sector Public Hospitals Procedure / Surgery € 100 € 30.000
Speeding up the case € 30 € 20.000
Tax Offices Arrangement for financial records audit € 100 € 20.000
Issuing of documents € 15 € 1.000
License Construction Bodies Issuing of a construction license € 200 € 8.000
Settlement of illegal building € 200 € 5.000
Private Sector Health Services (Hospitals, Clinics) Procedure / Surgery € 150 € 7.000
Medical tests € 30 € 500
Vehicles VTCC inspection € 20 € 100
Driver's License € 40 € 500

 

When people believe that their leaders and officials exploit their authority with impunity, they are more likely to act along similar lines in their own lives. This fatalism prevents any attempt to ask Greek citizens to bear the cost of balancing the Greek budget without steps that send a clear signal that the era of corruption is over, which is very difficult, since Greeks have become adept at negotiating the current system, just as they see their leaders doing.

How much does a bribe cost?

Greeks are most likely to pay bribes in hospitals, tax offices and construction-license bodies.

Corruption and the debt crisis – tax evasion

The debt crisis facing Greece is the result of many decades of spending, maladministration and structural problems.

Global Financial Integrity estimates that the amount of money lost by Greece over the last decade to illicit money like bribes and tax evasion leaving the country matches the latest bailout, equivalent to € 120 billion.

Various estimates suggest Greece’s unofficial, black economy is substantial. Tax evasion is widespread in Greece, and constitutes a core part of the country’s illicit economy. Clearly, tax evasion would not be possible without corrupting the tax collectors.

A poor system of tax inspections, helped by an opaque tax code, allows individuals and companies to bribe inspectors and evade taxes. The cost for evasive tax arrangements is between €100 and €20,000, according to a Transparency International Greece survey published in 2010.

The tax revenue that would have been provided by these diverted assets could have helped bolster the economy and prevent the crisis and the unpopular austerity measures that have led to widespread protests in the country.

The law of the land?

The new Greece national integrity system report points out the structural flaws that allowed corruption to become endemic.

While Greece has many laws in place to fight corruption, the report warns that they are not being enforced, and that in many cases other laws effectively condone corruption:

This leaves Greeks to navigate what the report calls a state of “corrupted legality”.

For decades, the Greek public sector has been allowed to act without any transparency or effective oversight. As a result, a lack of integrity, a tendency to demand and accept bribes, and a generalised cynicism toward honest public service have all proliferated.

Transparency International Greece has submitted a series of recommendations to the government. Read more about the action Transparency International Greece is already taking to fight corruption here.

The way forward: a champion for transparency

If the dire debt crisis is to be the start of a new era for Greece, the government should send a strong message that the excesses of the past will no longer be tolerated.

Politicians can start by getting their own houses in order, and by finally obliging political parties to make their accounts and donations open for the public to see. Only 7 per cent of Greeks say party financing is transparent enough, the lowest in Europe, again.

25 per cent – the percentage of Greeks who refused to requests for bribes from public sector officials in 2011

Only one Greek in ten says they see enough corruption prosecutions or strong enough punishments for offences. With good reason. Our report finds that despite the extensive cases of corruption reported, according to official data only about 2 per cent of civil servants are ever made subject to disciplinary procedures.

€ 50 billion – the value of Greek state assets and public services to be privatised as part of the conditions for being bailed out

As their country faces travails similar to Greece’s, Transparency International Portugal has called upon the European Union and International Monetary Fund to ensure transparency in the carrying out of economic reform. Read more.

Resources

News coverage

Wall Street Journal: Corruption May Prolong Greek Debt Crisis, New Report Says

Reuters: Greece doing little to fight corruption, group says

Global Post: Greece is a "corrupt legality," new report says

Kathimerini: Some laws condone graft, local IT chief says

Press release: Corruption threatens to prolong Greek crisis

Blog post on the European NIS programme

Transparency International Greece 2010 National Corruption Survey

National Integrity System studies

The National Integrity System assessment analyses the extent and causes of corruption, as well as the effectiveness of national anti-corruption efforts. The research is focused on the main public institutions and non-state actors that constitute the key “pillars” of the overall system of governance.

 

For any press enquiries please contact press@transparency.org

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