Opinion
By Yiannos Stavrinides
Corruption in a state carries real costs. It slows growth, erodes trust, and ultimately weakens the quality of democracy citizens experience.
Across the EU, corruption is estimated at about 1 percent of GDP, or €120 billion each year. In Greece, under-the-table payments alone have been estimated at roughly half a billion euros annually. In Cyprus, opaque naturalizations have led to tax revenue losses of about €250 million.
Citizens pay the hidden cost of corruption through higher taxes, reduced public spending, or both. This happens because the state loses revenue to tax evasion and waste.
Corruption also distorts access to public services. Those with connections and money gain the advantage, while others are left behind. It also discourages high-quality foreign investment, since serious investors tend to avoid environments where corruption is entrenched.
Disengagement from public life is another consequence. Corruption fuels cynicism toward institutions, undermines the sense of justice, and weakens public trust.
At its core, a corrupt system seeks to weaken independent institutions that could otherwise serve as safeguards in a healthy democracy.
As corruption rises, clientelism expands. Access becomes a privilege reserved for insiders and political allies.
Cyprus was drawn into its own period of systemic corruption following the collapse of its public finances and banking system. The “golden passport” program caused severe damage to the country’s international reputation and created long-term consequences that will continue to weigh on the country for years.
European authorities warn that in some countries, tax evasion linked to corruption may reach as high as 20 percent of GDP, strengthening the shadow economy.
In public finance, the cost of corruption can be assessed through indicators such as the share of problematic or direct-award contracts in total procurement, as well as the extent of cost overruns compared to original budgets.
In governance, progress can begin with measurable indicators that track the ability to control corruption. These include how long it takes to resolve cases in the justice system and how many corruption-related cases remain pending.
Even a government with limited political will could take meaningful steps without waiting for sweeping reform. It could adopt transparency measures such as open data and build a functional e-government system that improves interaction with citizens. It could invest in research, innovation, and stronger oversight. It could also set clear targets for limiting cost overruns in public tenders and reducing decisions that are later overturned in court.
The latest period, marked by “videogate,” has once again pushed the country and its economy inward. The problem has reached a breaking point and can no longer be ignored. Acknowledging it is a necessary first step. A practical place to begin would be the creation of an institutional committee to map the problem using the indicators outlined above. Only then can we fully understand the situation and take action. If we fail to act, we will continue to undermine both ourselves and future generations. For now, what is needed is composure and restraint.
