The European Commission said that "breathtaking" corruption affects all 28 EU member countries and costs around €120 billion (£99bn) a year.

A corruption report found that EU member states have taken steps in recent years to fight corruption, but that the results were uneven and that more needed to be done.

European commissioner Cecilia Malmstroem warned: "Corruption undermines citizens' confidence in democratic institutions and the result of law, hurts the European economy and deprives states of much-needed tax revenue.

"Member states have done a lot in recent years to fight corruption, but it is far from enough."

The commission said it was the first time it had produced such a report and made recommendations tackling corruption.

National governments, rather than EU institutions, are chiefly responsible for fighting corruption in the EU, it said.

EU anti-fraud agency Olaf focuses on fraud and corruption affecting the EU budget but is hampered by limited resources.

Ms Malmstroem said that in some countries public procurement procedures were vulnerable, while in others party financing was the main problem.

In some countries patients even have to pay bribes in order to get adequate medical care, she noted.

EU police agency Europol said bribery and VAT fraud were endemic in many EU countries.

Europol director Rob Wainwright warned last year that VAT fraud in the carbon credits market had cost the EU about €5bn (£4.1bn).