economy is almost equivalent to the size of the Romanian economy.

Eight out of ten EU citizens believe that close links between business and politics lead to corruption.

"Europe's problem is not so much with small bribes on the whole," Carl Dolan of Transparency International in Brussels, told Reuters. "It's with the ties between the political class and industry."

"There has been a failure to regulate politicians' conflicts of interest in dealing with business," he said.

"The rewards for favouring companies, in allocating contracts or making changes to legislation, are positions in the private sector when they have left office rather than a bribe."

The European Commission recommended better controls and a redoubling of enforcement.

The report was published shortly after Romania's former prime minister, Adrian Nastase, was sent to jail for four yearsfor taking bribes.

He was the first prime minister to be put behind bars since the collapse of communism in Europe in 1989.

The EU has repeatedly raised concerns about a failure to tackle corruption at high-level in Romania and Bulgaria, the bloc's two poorest members.

They have been blocked from joining the passport-free Schengen zone over the issue since their entry.

In October 2012, former European Health Commissioner John Dalli was forced to quit after an associate was accused of asking for 60 million euros from a tobacco company in return for influencing EU tobacco law.