A conflict of interest arises when politicians receive direct donations or funding from companies and wealthy individuals. Their personal financial gain start interfering with the best possible outcome for the citizens they represent.
While the funding does not have to be directly bound to policies or political action, indirectly it can be used for the same purpose.
Recent examples for direct donations include the “mask affair” in Germany in which politicians received hundreds of thousands of euros for giving government contracts to specific companies. https://de.wikipedia.org/wiki/Maskenaff%C3%A4re
Examples of indirect donations are private gatherings with companies who then donate towards the politician or their campaign.
As elected politicians are representing their country’s citizens and are employed by them, it is crucial that any income that could interfere with their political orientation has to be made transparent and any kind of lobbyism jobs and direct donations banned. Politicians taking important company jobs after their term has to be banned as well, to avoid exploitation of government flaws they have learned about during their term.
While in Greece politicians already have to fully disclose their income, many countries in the EU are still lagging behind, including Germany.
“In Greece, every May MPs like me have to disclose our income and where it comes from, our account balance, stock holdings, real estate, cars, etc.” https://mobile.twitter.com/VaroufakisDE/status/1370069182881144842
Germany is lagging behind due to an improper control mechanism in which one MP (Wolfgang Schäuble) is solely responsible for checking on his colleagues (which he rarely does).
A ban and fines on lobbyism jobs, direct donations, while making incomes fully transparent is needed.