• Germany edition
Business & Money
Photo: DPA

Corruption 'will cost Germany €250 billion'

Published: 16 Mar 12 09:12 CET | Print version
Online: http://www.thelocal.de/money/20120316-41373.html

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

What do you think? Leave your comment below.


Your comments about this article:

#1
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
Report abuse »
#2
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....
Report abuse »
#3
01:19 March 18, 2012 by sfd69
Sounds like America-EVERY day ALL day...
Report abuse »
#4
14:33 March 18, 2012 by catjones
sfd69...care to back up your claim with facts?
Report abuse »
#5
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.
Report abuse »
#6
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?
Report abuse »
#7
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.
Report abuse »
ADD YOUR COMMENT   (YOU MUST LOG IN OR REGISTER TO MAKE A COMMENT)
Business & Money headlines
Photo: DPA

Economists warn against German euro exit

While a third of Germans would rather pay with the old Deutsche mark than the euro, economists warn that a German exit from the currency union would result in a disaster. READ () »

Photo: DPA

Germany cool to France's EU economy plan

Germany said Friday that French President Francois Hollande's proposal for a eurozone economic government was "interesting" but reacted coolly to his call for strengthened European budgetary powers. READ () »

Photo: DPA

Au pairs rules relax for non-German families

Foreign families will soon be able to officially engage au pairs from outside the European Union, as long as they speak German at home, as the government prepares to change the law. READ () »

Wolfgang Schäuble and his French counterpart Pierre Moscovici. Photo: DPA

Germany refuses to slam French economic policy

Germany will not publicly criticize France over economic policy, German Finance Minister Wolfgang Schäuble insisted on Thursday, amid differences between Berlin and Paris over growth versus austerity in battling the eurozone debt crisis. READ () »

Photo: DPA

Capri-Sun drink wins false advertising award

A German food industry watchdog singled out drinks-maker Capri-Sun for its annual advertising "award" on Thursday, for what the group described as "shameless" marketing of sugary drinks to children. READ () »

Photo: DPA

Anaemic economy feels winter chill

The German economy, Europe's biggest, clocked up anaemic growth at the start of 2013 as the freezing winter weather put the brakes on activity, official data showed on Wednesday. READ () »

Photo: DPA

ThyssenKrupp bins 3,000 admin jobs

German heavy industry giant ThyssenKrupp said on Wednesday it plans to axe 3,000 administrative jobs worldwide as disastrous investments in steel operations overseas tore holes in its balance sheet in the second quarter. READ () »

Photo: DPA

Pay deal for metal workers averts strike

Germany's powerful union IG Metall agreed a pay deal with the metal industry's employers association early Wednesday, averting the threat of a major strike. READ () »

Photo: DPA

First ever strike hits Amazon's German unit

German employees of Amazon staged their first-ever walkouts on Tuesday as the US internet retail giant was hit by a dispute over pay. READ () »

Photo: DPA

Volkswagen plans giant car plant in China

German auto giant Volkswagen will build a plant in central China, a spokesman said Tuesday, as it battles US rival General Motors to be the top foreign automaker in the world's biggest car market. READ () »

More Business & Money
More popular articles »

See all ads | Join the Marketplace

Jobs in Germany, in English

784 jobs available
505 new jobs this week
0 new jobs today

ALL JOBS »

Latest Business & Money news from Sweden
News from the Goethe-Institut
News from DeutschlandOnline

Noticeboard
SHOW ALL NOTICES »
Toytown Germany
Germany's English-speaking crowd
Toytown Germany
FULL INDEX »
Trade CFDs with InterTrader.com
Start trading shares, equities, forex, etc. No commission on equities; Low min. margins. Apply for a CFDs account now!
Little house in Spain
'Charming, old, beamed cottage for holiday let in Jesus Pobre, Alicante, Spain
www.littlehouseinspain.com/
Albatross Insurance
Professional and qualified consultancy on all insurance and finance matters in Germany, Telephone: +49 2163 571 1740, Email: bg@albatross-assurance.com
www.albatross-assurance.com
Hotel reservations in Berlin
Visiting Berlin anytime soon? Book your hotel in Berlin here.
Rental apartments in Berlin
For home-from-home holiday accommodation, search for a Berlin apartment to rent.