Greece's Other Problem
Wednesday, March 7, 2012 at 9:08AM
Richard L. Cassin in European Union, Italy, Portugal, Spain, Transparency International

Corruption problems underlie the Greek debt crisis and may prevent an economic recovery, according to a new study by Transparency International.

TI-Greece's 'National Integrity System assessment' found that 98% of Greeks believe corruption is a major problem in their country and 88% think bribery is part of the business culture.

'We all know about the debt crisis,' said Costas Bakouris, President of TI-Greece. 'But Greece is also suffering a crisis of values. It has the right laws in place but does little to enforce them. The law is being violated, the illegal is being legalized, and the international commitments to fight corruption are being ignored.'

TI's study found corruption in all segments of the Greek economy. It said 'buildings built illegally can be approved later, accounts can be validated without being seen by a tax inspector, and, most worryingly given the role of budget opacity in the debt crisis, many Ministries have “special accounts” to which normal rules of budgetary transparency do not apply.'

A few months ago, we said the amount of corruption in Eurozone countries may predict their debt problems.

Greece is perceived as Europe's most corrupt country, based on TI's corruption perceptions index. Other countries with debt woes -- Italy, Portugal, and Spain -- rank near the bottom of the cpi among Eurozone members.

TI's National Integrity System assessment of Greece can be downloaded here.

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