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Corruption 'will cost Germany €250 billion'
Photo: DPA

Corruption 'will cost Germany €250 billion'

Published: 16 Mar 2012 09:12 GMT+01:00
Updated: 16 Mar 2012 09:12 GMT+01:00

Corruption will blow a quarter-trillion-euro hole in Germany's economy in 2012, despite the country being near the top of Transparency International's anti-corruption index, an alarming new study has estimated.

The estimate, based on a study by Friedrich Schneider, economics professor at the Johannes Kepler University in Linz, Austria, topped the professor's own estimate of seven years ago, when corruption reached a low-point of €220 billion.

Economists agree that bribery and favours among public officials and private businessmen are generally dependent on the economic situation – the worse the economy, the more open people in authority are to a brown envelope under the table.

But according to a report in Die Welt newspaper, the study concludes that there are other factors at play, including what Schneider calls "increasing bad habits."

The professor thinks there are only two effective ways to prevent corruption – stricter rules and more severe punishments, or better pay. He added that the two needn't be mutually exclusive.

The researcher's conclusions are based on data from the corruption index kept by Transparency International since 1995. Germany ranks 14 in the chart of least corrupt countries.

Economists believe corruption damages the economy because bribery often leads to the best and cheapest offer losing a deal, which leads to smaller investments for these investment projects. This ultimately damages growth.

The Local/bk

The Local (news@thelocal.de)

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Your comments about this article

14:16 March 16, 2012 by wkeim
Germany has to improve the federal Freedom of information (FOI) law, adopt FOI laws in 5 local states (Bundesländer), ratify CoE and UN conventions against corruption and improve transparency of funding of political parties to catch up with Europe, America, OSCE, OECD and BRIC states (see weakness no. 2, 3, 4, 8, 34, 35 and 52 of National Integrity Report Transparency Germany http://home.broadpark.no/~wkeim/foi-ngo.htm ).

Walter Keim

Netizen
20:24 March 17, 2012 by The Man
It happens in every country, always has, always will. But the EU as a whole is perhaps the biggest example of corruption on a grand scale. The EU hierachy has made themselves a huge gravy-train of benefits, exemptions from tax, huge pensions and so on. Each time someone tries to sort out where the money is going and points out errors and complete lack of control of the budget, they are put under so much pressure and interference in their private lives they have to give up and nothing changes.

They of the EU hierachy are setting us an example of how to get away with poor accounting, control of money and barely-hidden corruption on a grand scale, so it is no wonder others take their lead from them....
01:19 March 18, 2012 by sfd69
Sounds like America-EVERY day ALL day...
14:33 March 18, 2012 by catjones
sfd69...care to back up your claim with facts?
22:11 March 18, 2012 by expatriarch
I think a 25% TAX FREE reward for discovered fraud for two years into the past and 3 years into the future would rut this problem in a matter of minutes. Literally, you would be able to count the minutes before the bodies would pile up. I could do with a chunk of the roughly € 312,000,000,000.00 that would make possible over the five years.

Combine that with the death penalty for white collar crime of something like a life-time cumulative € 5,000,000 or so would also do it. The death penalty is the only effective, sensible, and useful for white collar crime; besides eradicating heinous people. The deterrent effect, so often claimed by proponents of the death penalty only functions in cases of premeditated, rational, organized, collusive crimes; for which corruption as a subset of white collar crime is a very nice candidate.
07:58 March 19, 2012 by authun
Just like at Chicago, cat. Enough said.

What the he!! facts are you expecting sfd to come up with to answer such a stupid question?
10:19 March 19, 2012 by moistvelvet
Not surprisnig at all considerig corruption starts at the very lowest form, whether it be a Stadt worker driving his snowplough and gritter off route via his parents street, a mother volunteering to be involved in some offical capacity at a kindergarten and then receiving preferential treatment over child placement, or a someone's tax return being put to the top of the pile because it is a friend, they are all forms of corruption which to most people would seem harmless, but it is still corruption.
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