Financial Transparency Coalition

Cross posted from Transparency International’s Space for Transparency blog.

Croatia became EU member number 28 today. After Tudjman and Milosevic and a bloody war 20 years ago in the Balkans, this is definitely good news for both the European Union and Croatia.

The new story of the Balkans started with disintegration 20-odd years ago, but Croatia’s membership is a clear sign of the era of re-integration. We can only hope that the engine of the EU project will not be switched back into a reverse mode, and Croatia’s membership will give new incentives for the others in the Balkans to join the EU.

Nevertheless, we cannot ignore the risks this membership brings both to the EU and to Croatia. Joining the EU requires across-the-board reforms, particularly in the area of corruption. At Transparency International, we are worried about what happens after accession.

The last countries to join the EU, Romania and Bulgaria, are still plagued by corruption.

So are the majority of former Communist countries. A stark warning was issued by our report on corruption in Europe in June 2012:

In some countries of Central and Eastern Europe – particularly the Czech Republic, Hungary and Slovakia – there has been a rolling back of positive progress on anti-corruption since accession to the EU.”

By being “in the club”, the pressure dissipates and ironically political elites have much less incentive for good behaviour and hardly any sanctions if they “misbehave”. Based on their current performance, some members would not be admitted to the EU today.

What all the backsliding countries in the EU have in common is a lack of transparency about relations between politics and business. Croatia is no exception. On Tuesday we issued a report suggesting Croatia’s political parties let the public see barely half of what they actually spend.

A technical issue maybe, but important in a country that saw former Prime Minister Ivo Sanader jailed for taking bribes from foreign companies last year. As long as money flowing into politics is in the dark, the risk of companies and, worse still, organised crime, buying off politicians will be ever present.

The Corruption Perceptions Index 2012 shows that Croatia, ranked 62nd behind Oman and Namibia, still faces a high risk of public sector corruption. When it joins the EU, Slovakia, Italy, Romania, Greece and Bulgaria will be the only EU countries to rank lower. It must learn the lessons from these countries and make politics more transparent in order to fight corruption.

The upcoming discussion on a rule of law monitoring mechanism which would cover all EU member states is an important opportunity to draw on the experience of Croatia and lessons about fighting corruption learned from previous rounds of enlargement.

When the party on 1 July ends, Croatian politicians must accept that reform doesn’t stop here. They have to clean up politics, above all by making political parties publish where they get their money.

The same applies to the EU. Anti-corruption monitoring remains vital after the accession as well. Giving signals to the electorate in Europe in general and Croatia in particular that the “EU project” cannot tolerate corruption – especially high-level political corruption – is absolutely crucial to the fight against Europe-wide electoral disillusionment. It would help strengthen European citizens’ trust in Croatia, and Croatian citizens’ confidence in Europe.