Banks and corruption in the limelight ” “

Over the past few days the European Commission tackled a wide range of issues. The March European Council meeting on economic matters, the upcoming end of the legislature of the European Parliament that requires to process a set of legislative files – primarily the Banking union -, the end of term in office of the Barroso Executive (October 2014), have forced the College of Commissioners, often accused of inaction, to work overtime. Among the recent initiatives figure those for “industrial recovery”, safeguarding the right to vote in the May elections for EU citizens living abroad, the improvement of the quality checks on vocational and university education … Significant actions are aimed at the regulatory framework of major banks and the report on corruption in Europe. Stop to dishonesty. “Corruption continues to be a problem for Europe”, “corruption undermines public confidence in democratic institutions and the rule of law, it harms the economy and deprives Europe of necessary tax revenues”. Member States “have done much in recent years to combat it, but today’s report shows that it is far from sufficient”. Cecilia Malmström, Commissioner for Home Affairs, on February 3 presented the first report on the Union’s fight against corruption, with an overall picture judged as “very worrying”, and severe cases at domestic level, at least according to the Commission’s analysis. Corruption, carried out in various forms, costs, according to the executive, € 120 billion a year to the economy as a whole, i.e. to families, businesses, public administrations alike. “Despite the many measures taken in recent years at national level, the results are uneven – the Commission maintains – and more must be done in terms of prevention and repression”. The situation in Bulgaria, Romania, Greece, Italy, Hungary, Slovakia and Poland are considered delicate under many aspects. The report shows that “the nature and the level of corruption, and the effectiveness of the measures taken to counter it, vary from one Member State to another”. The Commission has accompanied the presentation of the Report with a Eurobarometer survey, which confirms the widespread feeling among European citizens that corruption is rampant within public institutions. The Commission has also provided a number of essential avenues of work which include, among other things, monitoring mechanisms (including codes of ethics) rules on conflict of interest, strengthening legislation thereby making corruption a criminal offense, supporting law enforcement agencies and the judiciary. The report also mentions the “moral integrity” of politicians, which is considered “a problem in many Countries”, and stepping up control on political parties funding. Areas “at risk” of corruption and illegitimate association of politics and business have been recorded especially in urban development, construction, healthcare. Safeguarding credit. Commissioner for the Internal Market and Services, Michel Barnier, on January 29 presented a proposal with new rules “to prevent larger and more complex banks to carry out risky trading activities on their own account”. The set of measures, which, according to Barnier “will further strengthen financial stability and will ensure that the consequences of errors” by credit institutions “are not borne by taxpayers”, is explained as follows: “This is the last tile that completes the mosaic of the revision of the rules governing the European banking system. The regulation involves a small number of very large banks that, without these rules may seem too big to fail, too expensive to save, too complex for us to solve their crisis”. The package of measures is meant to protect the future and the stability of the single credit market. The proposals are gauged in order to “ensure the delicate balance between financial stability and conditions that allow lending to the real economy, an element that is of decisive importance for competitiveness and growth”. The proposal, due to undergo debate for approval by EU Council and Parliament, “will be applied only to banks in large Member countries, with “substantial negotiation activity”, the Executive pointed out. Among other things, it stipulates a ban on transaction when “it is done solely for the purpose of obtaining a profit for the bank, entailing many risks but no tangible benefit for clients or to the economy in general”, the power of supervisory authorities “to impose the transfer of other high-risk transaction activity assets trading at high risk (e.g, complex transactions in derivatives and securitization…) to separate legal transaction entities within the group”.