2. Hot summer 2018 in Romania

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*  The remarkable gains made by several East European states in the crusade against corruption in the name of the rule of law can no longer be considered secure. 

 Taking on the “first family”

Critics have similarly slammed Calovic-Markovic’s dismissal in Montenegro as politicised, and most likely intended as retribution for her NGO’s exposés concerning President Milo Djukanovic and his family.

MANS called the parliament’s decision part of a “political cleansing” undertaken by Djukanovic. “[I]t is completely clear that the replacement of Calovic-Markovic is revenge for revealing criminal activities of Djukanovic and his closest circle, and an attempt to stop the fight against corruption,” the NGO said in a statement.


  • Under Calovic-Markovic’s leadership, the NGO has published evidence connecting Djukanovic and his family to allegedly corrupt deals. Most recently it claimed majority state-owned power utility EPCG had purchased Rudnik Uglja coal mine from shareholders, including the president’s brother Aco Djukanovic, at inflated prices.
  • Calovic-Markovic has a long history of trouble with the Montenegrin authorities. She has been tried and fined by the courts several times. In 2013, she was fined €600 in absentia by a Montenegrin court for her participation in an action accusing the constitutional court of serving the interests of the first family. Her lawyer argued that the court’s decision to fine her in absentia was in breach of both Montenegrin and EU legislation.
  • At the same time as removing Calovic-Markovic, MPs also voted to dismiss Irena Radovic from the post of deputy central bank governor. Radovic claimed she was dismissed because she failed to support governor Radoje Zugic, who is among Djukanovic’s most loyal party members, after he ordered her to impose tougher control over some banks while leaving others to operate without any supervision, daily Vijesti reported. For his part, Zugic accused her of incompetence and lack of professionalism.

Montenegro can’t be seen as a beacon of the anti-corruption fight in the way Romania has been in recent years, as little has been achieved when it comes to throwing the book at corrupt top officials. When the former president of Serbia & Montenegro, Svetozar Marovic, was sentenced to 46 months in jail for his participation in the so-called Budva affair in 2016 it was hailed as a milestone in the country’s fight against top level graft. Yet despite admitting guilt, Marovic never actually went to prison, going missing shortly after he was sentenced by the judge.

In April, thEuropean Commission slammed Montenegro for its lack of progress in the fight against organised crime in its progress report and said that the country needs to make further progress in most other areas. “Despite some progress, corruption is prevalent in many areas and remains an issue of concern,” the report noted. At the time, the EC also commented on “Challenges to the credibility, independence and priority-setting” of the Anti-Corruption Agency.

Leading by example 

The effectiveness of the DNA in bringing top officials to account in Romania has naturally attracted the attention of the country’s neighbours to the south and east, who lag behind in the fight against corruption.

Officials in Bulgaria, which was once well ahead of Romania but has recently languished and is now considered the most corrupt country in the EU, have been looking to the Romanian example to revitalise their own struggles against corruption. As far as ordinary people are concerned, Bulgaria is still years away from Romania, which is seen as the example of what could be done if only the right people are put in power.

  • In Bulgaria, the third government of Boyko Borissov promised to fight corruption — just as his two previous cabinets promised. The current government has established a new special prosecution unit that is supposed to fight high-level corruption.
  • However, so far it has proven ineffective, as it has not launched a single new case. A recent report in daily Dnevnik revealed that so far the special prosecution has either worked on old cases or has filed cases where the procedures were not properly met or there is insufficient evidence to launch a trial.
  • Four cases were ended by courts, while in one case the accused was found not guilty.

And with the ongoing implosion of the anti-corruption fight in Romania, what hope is there for its neighbour to the east, Ukraine, that together with Russia is ranked as the most corrupt country in Europe.

The ongoing struggle over the creation of the Anti-Corruption Court (ACC) illustrates the troubles Ukraine has had in making improvements, even with intense pressure from the International Monetary Fund (IMF) and other international donors.

The ACC is intended to be one part of a triumvirate that will provide a politically independent mechanism for charging those in high office with corruption. However, the administration of President Petro Poroshenko has vigorously resisted international pressure to set the court up. When the law on the ACC was finally adopted, it had one critical loophole allowing regular courts to overturn ACC rulings on appeal. This was sneaked into the final draft of the law by the government. NGOs were up in arms at the loophole and have demanded its removal, as has the IMF’s managing director Christine Lagarde, who praised President Petro Poroshenko for putting the law through but said explicitly that the cause that allows decisions to be appealed in regular courts must be removed. The IMF has effectively frozen its desperately needed $17.5bn support programme for the Ukraine until the law is changed.

Doomed to be corrupt?

For the most part, the East European states are more corrupt than their neighbours to the west, and corruption becomes even more endemic moving eastwards into Eurasia.

Watchdog Transparency International’s annual Corruption Perceptions Index (CPI), however, shows this is not always the case. The Baltic states and Slovenia are ranked less corrupt than long-term EU members Spain, Italy and Greece. Georgia is the bright spot in the Eurasian region, having climbed no less than 78 places on the index since the Rose Revolution in 2003. This all shows that corruption can be overcome; the pity is that it hasn’t been in so many countries, often due to a combination of stiff political resistance and institutional sluggishness.

Romania has made steady progress up the rankings on the CPI over the last decade or more, especially in the five years since Kovesi took over at the DNA in 2013, rising from 83rd place in 2003 to a respectable 59th in 2007 – on a par with both Hungary and Italy.

Reformers in the CEE and Eurasian regions have some tough historical legacies to fight against. During the communist era informal networks and relationships were vital to securing scarce consumer goods, as well as doctors’ appointments, entrance to good schools and universities and so on. Long before that, regions like Central Asia and the Caucasus had entrenched systems of closely knit clans and extended family ties that persisted into the communist era and afterwards. In the chaotic early transition years opportunities for corruption were rampant due to the massive gains to be had from privatisations and the wild west style capitalism that raged in the absence of an effective institutional framework.

After the legacy of communism was torn down it took a long time to build new institutions. The social breakdown also caused by the collapse of communism, which happened to varying extents in most of the region, forcing citizens back into relying on those they knew and trusted, ensuring the informal links of the communist era continued by creating a climate in which personal loyalties outweighed formal duties.

This isn’t to say countries from the former Eastern bloc are doomed to remain corrupt forever. In CEE it’s approaching three decades since the end of communism, while in the former Soviet countries it’s just 27 years; this is still a short time if you take into account that most were grappling with turbulent transitions and economic collapse for at least the first decade after the fall of the Soviet Union.

Those Western countries that score much better on the index typically made reforms a lot further back in their history — in the UK, for example, the civil service was a hotbed of patronage and nepotism in the 19th century, which was only changed with the adoption of the Northcote Trevelyan reforms that took many years to force past politicians to accept governmental service entrance exam rather than the known quantity of the sons and nephews of their associates and social equals.

The prospect of EU accession has been and still is an important impetus to address corruption among aspiring members. Yet backsliding has often been observed afterwards, meaning states from the region that have now been in the union for 14 years are still rated among the most corrupt.

  • Moreover, the billions of euros of EU structural funds and subsidies heading east to the poorer members of the union represents a huge opportunity for fresh corruption, with notorious examples being nomination of Andrej Babis as Czechia’s prime minister even after he was charged with fraudin the Capi hnizdo (Stork Nest) case centred on a €3mn EU subsidy obtained a decade ago, and the “established system of organised fraud” uncovered by EU anti-fraud agency OLAF concerning the public lighting projects won by Elios, a company once co-owned by Hungarian Prime Minister Viktor Orban’s son-in-law, Istvan Tiborcz
  • Unlike the Czech Republic and Hungary, Romania and Bulgaria are considered by many to have been allowed into the EU too soon, before all the required reforms were carried out and they are therefore subject to the Cooperation and Verification Mechanism (CVM), a monitoring procedure that involves the issuing of annual reports on their activities to fight corruption and (in Bulgaria’s case) organised crime.
  • Officials from both governments have expressed their hopes of exiting the rather humiliating CVM but this has not been enough to ensure they remain committed to the fight against corruption.

Similarly, in the climate of rising nationalism in the Visegrad Four countries in particular, their governments are less inclined to be shamed into staying on the reform path set by Brussels. A case in point is Poland, where the ruling Law and Justice Party defied tens of thousands of domestic protesters and international opprobrium to force the retirement of Supreme Court justices older than 65, effectively putting the government and president in control of the country’s judicial system.

Undermining the EU’s ability to sanction Poland, Hungary has said it will stand by its neighbour thereby blocking any attempt to strip Poland of its voting rights which needs unanimity among EU members. Even the prospect of losing out on some of their EU funding has not been enough.

The growing authoritarianism in some countries in the region goes hand in hand with corruption. As Transparency International pointed out in its 2017 CPI, the authoritarian shift in numerous countries hinders anti-corruption efforts and threatens civil liberties. “Across the region, non-governmental organisations (NGOs) and independent media experienced challenges in their ability to monitor and criticise decision-makers,” the report said.

While the axe taken to judicial independence in Poland is motivated more by the government’s pursuit of its illiberal agenda, and Bucharest’s judicial “reforms” are a direct attack on anti-corruption institutions, the weakening of the judiciary in Poland is still likely to have the longer-term effect of weakening efforts against corruption.

In Hungary, Fidesz’ latest supermajority victory in the April general election puts Viktor Orban’s government in an increasingly powerful position and able to act with greater impunity; this is worrying given the clout enjoyed by powerful businessmen close to the Hungarian premier.

Even Estonia, which is consistently top ranked on the CPI among countries from the region, has come under scrutiny after revelations that up to €7bn was laundered via Danske Bank in Estonia, while the European Central Bank’s effectiveness has been questioned after scandals broke concerning money laundering the Latvian banking sector.

Given this rather dismal picture, the achievements by Romania’s DNA under Kovesi were all the more impressive. Her dismissal and the simultaneous drastic undermining of the anti-corruption fight in Romania is therefore not just bad for Romania but for the wider East European region.

With additional reporting from Denitsa Koseva in Sofia and Carmen Simion in Bucharest.


The publication is not an editorial. It reflects solely the point of view and argumentation of the author. The publication is presented in the presentation. Start in the previous issue. The original is available at: intellinews.com




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