Corruption is costing $185 billion a year across European Union's 28 countries, and an increasing number of EU citizens think the practice is getting worse, a survey by the European Commission has found.

The European Union says its first report on corruption within the bloc has revealed a "breathtaking" level of misconduct, and that trust is being eroded in democratic institutions and helping organised crime to grow.

It found three-quarters of Europeans surveyed felt corruption was widespread, with high levels of bribery noted in Greece, Romania and Bulgaria.

The EU's home affairs commissioner, Cecilia Malmstroem, says corruption was noted in each of the 28 EU member states.

"There are estimations that corruption costs in the European Union is no less than 120 billion euros each year, and that is the equivalent of an EU annual budget so it's a lot of money we are talking about," she said.

"Corruption undermines citizens' confidence in democratic institutions and the rule of law, it hurts the European economy and deprives states of much-needed tax revenue."

The report places the EU, often portrayed as one of the globe's cleanest regions, in an unflattering light.

Among businesses, belief is widespread that the only way to succeed is through political connections.

Greece, Spain, Italy seen as worst offenders

Experiences of corruption vary across the 28-country bloc. Almost all companies in Greece, Spain and Italy believe it is widespread, according to the report.

Corruption is considered rare in Denmark, Finland and Sweden.

That mirrors the finding of Transparency International's corruption perception index.

It named Greece as the worst performer in the EU, sharing 80th place globally with China. Denmark was seen as the least corrupt.

Construction companies, which often tender for government contracts, are the most affected. Almost eight in 10 of those asked complained about corruption.

Overall, 43 per cent of companies see corruption as a problem.

"Europe's problem is not so much with small bribes on the whole," Transparency International's Carl Dolan said.

"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. 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 years for taking bribes.

He was the first premier 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 high-level graft 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.

Reuters