One in four businesses in Ireland believe corruption among state bodies prevented them winning contracts for goods and services.
The finding is included in a detailed report into corruption in Ireland, and the other EU member states, which puts the cost to the union at €120bn a year.
The report — the first of its kind from the EU — finds that cronyism, political donations, and unhealthy ties between politicians and industry still exist in Ireland, despite the work of the Moriarty and Mahon tribunals.
It says steps taken by the Government have not gone far enough or fast enough to stamp out dishonesty.
The old system of “who you know” still rules, according to three-quarters of businesses, who claimed favouritism and corruption hamper competition, while two-thirds said that bribery and connections was the easiest way to get certain public services.
More than a quarter said that they had been prevented from winning a contract from the State, while an even bigger percentage, 39%, said that corruption was widespread among those who managed purchasing on behalf of the state and local authorities.
State and state-owned bodies purchase around €23bn worth of goods and services a year, making them the single, largest spender in the economy.
One in six businesses said that corruption was an obstacle to doing business in the country, one of the lowest percentages in the EU.
In Europe, the construction, telecoms and IT industries were particularly affected, with smaller companies hit more than larger ones. The worst countries were the Czech Republic, Portugal, Greece and Slovakia.
More than a quarter of Irish people believed they were affected by corruption in their daily lives, while a staggering 81% said that corruption was widespread. Both figures are higher than the EU average, but not as high as the 93% in Greece.
However, when it came to a personal experience of corruption, the country had one of the lowest proportions of people who knew someone who took bribes at 8% while just 3% said they were asked for a backhander for services.
While Commissioner Cecilia Malmstrom agreed much of the findings were based on perceptions rather than hard facts, she said they confirmed the trend in each country. “There are no corruption-free zones in Europe and citizens are worried about this, with 76% of citizens believing it is widespread and more than half believe it has increased in the last few years and four out of ten companies believe it is an obstacle to doing business in the EU.”
The report on Ireland made three recommendations:
* The gardaí, the Standards in Public Office Commission, and the Office of the Director of Corporate Enforcement have the power to decide themselves to investigate and prosecute corruption;
* Limit the amount of money anyone can give a political party and its candidates, fix a short time limit for reporting funding after elections, and extend this to cover referenda campaigns;
* Set up an independent urban planning regulator with the power to investigate problems and implement plans to prevent fraud and corruption especially at local level.
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