• Germany's news in English

Corruption 'will cost Germany €250 billion'

The Local · 16 Mar 2012, 09:12

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

Facebook Twitter Google+ reddit

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)

Facebook Twitter Google+ reddit

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

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.
Today's headlines
Nazi POW leaves estate to 'kind' Scottish village
The former German soldier stayed on to work in the Perthshire village for a time after the war. Photo: Andy Buchanan / AFP file picture

A former Nazi prisoner of war has left his entire estate in his will to a small village in Scotland to show his appreciation for the kindness he received there during his captivity.

US tries to block Chinese purchase of Aixtron
Photo: Oliver Berg / DPA / AFP

US President Barack Obama on Friday moved to block a Chinese company's purchase of German semiconductor equipment maker Aixtron by rejecting the inclusion of Aixtron's US business in the deal.

Merkel to chart 2017 election battle at party congress
Photo: Tobias Schwarz / AFP

After Donald Trump's shock victory, Francois Hollande's decision not to seek re-election and populism on the rise, German Chancellor Angela Merkel is next up on the campaign podium to set out her strategy for winning in 2017 polls.

Berlin vs Munich: whose newborn polar bear is cuter?
Berlin's (left) and Munich's (right) newborn bears. Photos: Tierpark Berlin / DPA

Both city zoos welcomed baby polar bears into the world in November, with Berlin zoo its releasing first photos on Friday. But which one is more adorable?

Learn how to speak German like a silver screen icon
Dirty Harry. Photo: DPA

We all agree that there is no other option than to learn irregular German verbs by rote. But when you want a bit of downtime, why not learn from your big screen heroes?

Stolen Dachau 'Work will set you free' gate found: police
The entrance to Sachsenhausen concentration camp. Photo: DPA

An iron gate from the former Nazi concentration camp in Germany's Dachau with the slogan "Arbeit macht frei" ("Work will set you free") has been found two years after it was stolen, police said Friday.

Mystery flight path artist draws new message in sky
Photo: DPA

A pilot who likes to draw patterns in the sky using his flight path has returned with his greatest artwork yet.

Berlin 'abusing power' to stop Snowden coming to Germany
Edward Snowden. Photo: DPA

Opposition parties have accused the coalition government of overstepping its authority in its attempt to block American whistleblower Edward Snowden's trip to Germany.

Germany gains record number of Michelin-star restaurants
Head of the Michelin Guide, Michael Ellis (centre) with Michelin-star chefs at a presentation in Berlin. Photo: DPA.

Germany had a slew of newly minted Michelin-star restaurants this year, and its top-rated establishments held onto their prestigious three stars.

At last: Germany passes major disabled rights reform
People in wheelchairs watch as the German parliament deliberates on the new disability rights reform. Photo: DPA.

For years people with disabilities in Germany have called for legislation to provide them with better benefits and opportunities in life and work. On Thursday the German parliament passed such a reform - but is it enough?

10 German Christmas cookies you have to bake this winter
Sponsored Article
The key to launching your international career
Our 10-step guide for doing Christmas just like a German
Here's why so many Germans vote for the far-right AfD
7 events in Germany that'll make December unforgettable
7 frosty German sayings to make you a winter wordsmith
This is how unequal German society has become
Six things you should know about the Lufthansa strike
9 ways living in Germany will make you a better person
These 10 German Christmas markets cannot be missed
8 German words that unlock amazing secrets in English
10 German words with simply hilarious literal translations
7 things Germans do that make foreigners feel awkward
Why Donald Trump's grandad was booted out of Germany
This is what is really inside your Döner kebab
Rejoice! Christmas markets start opening across Germany
These German universities are best at landing you a job
Why Heidelberg is Germany's most inspiring city
This soppy German Christmas ad will bring you to tears
Here's where Germans speak the best (and worst) English
10 German books you have to read before you die
U-Bahn train found filled with autumn foliage in Berlin
Seven German words that unlock amazing secrets about English
Germany's ten most beautiful towns you've never visited
jobs available
Toytown Germany
Germany's English-speaking crowd