Corruption and its effects on Romania and the EU

1.1.What is corruption?
Corruption is derived from the Latin verb rumpere, to break. According to this
approach, corruption is where the law is clearly broken. This requires that all laws must be
precisely stated, leaving no doubts about their meaning and no discretion to the public
officials. That is the ideal approach. The one closer to reality is:
,,Corruption is the misuse of entrusted power (by heritage, education, marriage,
election, appointment or whatever else) for private gain.
A scientific definition of this term, is given by dr. Petrus Van Duyne:
,, Corruption is an improbity or decay in the decision-making process in which a
decision-maker consents to deviate or demands deviation from the criterion which should
rule his or her decision-making, in exchange for a reward or for the promise or
expectation of a reward, while these motives influencing his or her decision-making
cannot be part of the justification of the decision.

1.2.What are the types of corruption?

Giving that corruption is a very complex action, it comes in various forms, on a wide
range of fields. Corruption can be:
a) Systemic corruption
b) Sporadic (individual) corruption
c) Political (Grand) corruption
d) Petty corruption

a) Systemic Corruption
Systemic corruption is when corruption is an integrated and essential aspect of the
economic, social and political system, when it is embedded in a wider situation that helps
sustain it. Systemic corruption is not a special category of corrupt practice, but rather a
situation in which the major institutions and processes of the state are routinely dominated

and used by corrupt individuals and groups, and in which most people have no alternatives to
dealing with corrupt officials.
b) Sporadic (individual) corruption
Sporadic corruption is the opposite of systemtic corruption. Sporadic corruption occurs
irregularly and therefore it does not threaten the mechanisms of control nor the economy as
such. It is not crippling, but it can seriously undermine morale and sap the economy of
resources.
c) Political (Grand) Corruption
Political corruption is any transaction between private and public sector actors through
which collective goods are illegitimately converted into private-regarding payoffs. Political or
grand corruption takes place at the high levels of the political system, when politicians and
state agents entitled to make and enforce the laws in the name of the people, are using this
authority to sustain their power, status and wealth.
d) Petty Corruption
Small scale, bureaucratic or petty corruption is the everyday corruption that takes place at
the implementation end of politics, where the public officials meet the public. Petty
corruption refers to the modest sums of money usually involved, and has also been called
low level and street level to name the kind of corruption that people can experience more
or less daily, in their encounter with public administration and services like hospitals, schools,
local licensing authorities, police, taxing authorities and so on.

1.3. How does corruption affect a country?

For many years Macro level studies, using country-level data to explore cross-country
variations in both governance and economic indicators, have consistently found that
corruption significantly decreases economic growth and development.
They also showed that corruption discourages investment and acts as an additional cost
of doing business, reducing the profitability of investment projects.

1.4. Corruption in the EU.

For many years corruption was seen in Europe as a problem only for second-tier
countries (developing ones), while the EU was actually ,,the temple of integrity both moral

and legal. Of course that this impression was given by the countries that still are among the
best governed in the world, but there are several examples (Greece, Italy, Portugal, Spain
etc.) that have all regressed since they joined. That raised a big question mark over the
transformative effect of the top EU countries on their newly joined members.
Although, on average, more than 90% of Europeans in the 27 (recently 28) EU member
countries declare that they were not asked for a bribe last year, 79% fully or partially agree
that corruption exists in their national institutions. Also, almost half of the Europeans (47%)
think that the level of corruption has risen in the past 3 years. That is, least to say,
questionable.
In the East European member countries, exception making Estonia and Slovenia, more
than 10% of the people part of the survey, had directly encountered some form of bribery last
year. The gap between the widespread of corruption and the actual tangency of the population
with bribery, means that they are aware that other types of behaviour as peddling of political
influence, favouritism or clientelism, as well as bribery, are corrupted.
But how do we measure corruption? Well, we do that by: gathering the informed views
of relevant stakeholders, conducting surveys in countries, audits of specific sectors or projects
with the goal of understating if the allocation of public resources is fair and universal.

1.4. Corruption in Romania

Romania is a member of the EU since the first of January 2007. That gave the country a
huge boost from both economical and perspective. But only for a short period of time.
Romania enjoyed a prosper year under the EUs tutelage until the economical crisis of 2008
severely damaged the way investors saw us, the economy and most importantly, as the
citizens were to see, the level of trust in the state.
Since 2008, Romania went on a downslope from any point of view, losing investors,
credibility and becoming a in debt country. Theres where the IMF comes in scene. Romania
made several loans from the IMF that solicitated drastic rulings as salary cuts, pension cuts,
that damaged the image of both Government and Parliament, and along with that, it opened
the eyes of the citizens when it comes to corruption.
The Romanian GDP is evaluated at 150 billion euros. From that, Romania spent in
2010 approximately 33.56 billions on works, goods and services, meaning that it spent about
25% of their GDP just for this. Unfortunately, the shadow economy (black market) represents
28% of Romanias GDP (2013 estimate). In the World Bank Doing Business Rank 2013 we
are on the 72nd place from 185, with the EU worst on the 102nd spot, so Romania most
certainly does not excel. On a more depressing survey, Romanias Government Effectiveness
and Corruption Control are placed last among EU Members, which is least to say alarming.
A recent survey shows that 93% of the Romanian population believes that corruption is
a widespread, 27% believes that the efforts to combat corruption are effective. Also 64% of
the Romanians find nepotism and patronage to be a very serious or quite serious issue.

Another shocking survey shows that 65% of the investors find corruption to be a very serious
problem when doing business in Romania, meaning that investors run from the country.
Starting from 2013, the DNA and NAFA conducted a series of investigations on known
to be corrupted high officials, and after the end of Train Basescus mandate, lots of them were
convicted and several more are to come, and also the economical rulings apply more strictly
now, maybe even exaggerated as some see it