COMMENTARY | The movie "My Life in Ruins" depicts an American tour guide frustrated with the corruption and shenanigans in Greece. It's all played for laughs, but it might not be a laughing matter for Europe. Whether it is the Greek elections, Spanish banks or the Portuguese economic downgrade, corruption might have contributed to the economic meltdown as well as the inability of countries to rebound from the crisis.
Until now, elections and riots have received the majority of the coverage in the eurozone crisis as parties in power are voted out or targeted for receiving or sending a bailout package. Even the Euro 2012 soccer tournament has received more interest than corruption, which could turn out to be the real culprit.
Even those who mention corruption only mention it in the vaguest terms or link it to a single political leader. There's little systematic analysis of the problem or how it impacts Europe. Until now, we hear more about those stingy Germans or generous Greeks.
But corruption could be the variable that kicked off the economic crisis and is keeping locals and foreigners hesitant to help with the recovery, afraid such money will only line the pockets of those responsible for the chaos in the first place.
Transparency International , which provides an analysis of the problem with the annual "Corruption Perception Index," demonstrates the gap between European countries in trouble and those that have largely weathered the storm.
Among OECD countries, Scandinavian countries have the best scores (9 and above), meaning the least perceived corruption. Others faring well include Germany, Switzerland, the Netherlands, Australia, Japan and Canada (scores of 8 to 9). Those in OK shape (but could do better) include Austria, Belgium, France the United Kingdom and the U.S. (scoring 7 to 8). Even up-and-comers Chile, Uruguay and Qatar can be found here. Not surprisingly, these are the countries doing the best economically, depending on how close to a "10" they are.
Go below those countries and you'll see some problems. Spain and Portugal rank behind Estonia in Eastern Europe. Italian and Greek scores are behind many Third World countries, and in the same category with Mexico and Russia.
Sure these numbers might seem like post-hoc analysis. But take a look at the Corruption Perception Index for 2007, before the crisis, and you'll see a similar tale foreshadowing future problems.
The measure isn't a perfect predictor of problems. Iceland and Ireland have their problems, and still rank favorably on Transparency International's scale. It could be an investment bubble unrelated to corruption that did in those countries' economies.
Now the Corruption Perception Index is just that, based on perceptions. But those perceptions are inhibiting the response as outside investors and lenders are wary of putting money in a bag with a hole in it.
A series of bailout packages and fiscal constraints are being proposed to solve the eurozone crisis. But unless they include provisions for transparency, accountability, and a series of anti-corruption measures, these rescue plans probably won't change much for those nervous about investing where fraud has left the place "in ruins."