• Reasons for and objectives of the proposal

Corruption is highly damaging to society, to our democracies, to the economy and to individuals. It undermines the institutions on which we depend, diluting their credibility as well as their ability to deliver public policies and quality public services. It acts as an enabler for organised crime and hostile foreign interference. Successfully preventing and fighting against corruption is essential both to safeguard EU values and the effectiveness of EU policies, and to maintain the rule of law and trust in those who govern and public institutions.

Corruption is an impediment to sustainable economic growth, diverting resources from productive outcomes, undermining the efficiency of public spending and deepening social inequalities. It hampers the effective and smooth functioning of the single market, creates uncertainties in doing business, and holds back investment. Corruption is by its nature difficult to quantify, but even conservative estimates suggest that it costs the EU economy at least EUR 120 billion per year [This estimate is based on the work of specialised institutions and bodies, such as the International Chamber of Commerce, Transparency International, UN Global Compact, World Economic Forum, and Clean Business is Good Business, which suggest that the loss of economic wealth due to corruption amounts to 5% of GDP at world level. Another estimate suggested that the costs of corruption were between EUR 179 billion and EUR 990 billion per year in the EU (The Cost of Non-Europe in the Area of Corruption study by RAND Europe, 2016).]. The negative effects of corruption are felt worldwide, undercutting efforts to bring good governance and prosperity, and to meet the United Nations Sustainable Development Goals.