EU Economy
Recession fuels huge growth of organised crime in Europe
By Finfacts Team
Jun 25, 2013 - 6:27 AM

Card skimming: the genuine keypad is covered with a fake Photo: Europol

The recession has fuelled a huge growth of organised crime in Europe with 3,600 criminal syndicates now active across the continent, profiting a range of activities from card fraud to making fake products. Meanwhile on Monday, Europol, the European police agency, published an assessment [pdf] on Italian organised crime, which is the result of two years of work by intelligence analysts, and underlines how the main Italian organised crime groups (principally ‘Cosa Nostra’, the ’Camorra’ and the ’Ndrangheta’) are operating worldwide but are careful to keep a very low profile, making it difficult for law enforcement agencies to detect their presence.

“The Italian mafia-style groups are among the most threatening in Europe and in order to fight them, a pan-European approach is needed. Those of us in the law enforcement community need to step up our cooperation in tackling the most dangerous criminal groups,” says Rob Wainwright, director of Europol.

The main criminal activities of these groups are money laundering and large-scale drug trafficking. However, they are also involved in corruption, counterfeiting and the trafficking of toxic waste. These groups’ activities are particularly dangerous because they undermine the legitimate economy.

In these times of economic crisis, the immense assets that organised crime groups have at their disposal (the Calabrian Ndrangheta are estimated to generate illicit revenues of up to €44bn a year) make it easy for these groups to infiltrate the legitimate economy, injecting much-needed liquidity into struggling businesses.

Europol says no truly legitimate business can afford to compete with criminal companies that can manage to produce goods and services at a loss as part of a long-term strategy to take over markets. The criminals’ ‘expansion strategies’ mean that they are now touching parts of Italy and Europe not historically affected by organised crime, which could cause serious damage to the EU economy in the long run.

The threat assessment concludes with a series of recommendations for law enforcement authorities and policy makers. Meanwhile, Europol has set up an operational project dedicated to tackling Italian organised crime groups. The project is fully supported by Italian law enforcement and judicial authorities, who are playing a key role thanks to their in-depth experience in the field. Many EU member states, non-EU countries and organisations such as Eurojust are also involved in the project.

Europe's black market

Europol says Europe’s black market in counterfeit foodstuffs, pharmaceuticals and machine parts doubled to a value of about €2bn in the early years of the recession.

VAT fraud is estimated to be valued at €100bn a year in Europe.

“[Organised crime] is having a particularly negative effect on government’s attempts to recover from the economic recession by draining away these resources in taxpayer’s revenue,” Rob Wainwright told The Financial Times.

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