• 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

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.

Story continues below…

The Local/bk

The Local (news@thelocal.de)

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
Sinking Deutsche Bank stock sends shock across Europe
Photo: DPA

Shares in Germany's biggest lender Deutsche Bank plummeted on the Frankfurt stock market on Friday, dragging other European banks and global markets down with it, after reports some customers were pulling money out.

The Local List
10 things you never knew about German reunification
Reunification celebrations in Hanover in 2014. Photo: DPA

With German Unity Day (October 3rd) happening on Monday, Germans are looking forward to a three-day weekend. But did you know these facts about reunification and German Unity Day?

Munich pharmacy’s nighttime porno show draws crowd
Photo: DPA

When a police patrol in Munich's Sendlinger Tor area noticed a crowd gathered outside a pharmacy window they went to investigate. But the onlookers weren't interested in a new line of flu medicine.

Small town mayor beaten up for plan to house refugees
File photo: DPA.

The mayor of the small northern town of Oersdorf, Schleswig-Holstein, was beaten up by an as yet unknown person, police reported on Friday, seemingly because of plans to provide a home for refugees.

Fire at major Ruhr area hospital kills at least two
The fire in Bochum. Photo: DPA

Tragedy struck the western German town of Bochum on Friday morning when a huge fire broke out in a hospital in Bochum, killing at least two people.

Merkel condemns 'barbarous' Russian strikes on Aleppo
Photo: DPA.

US President Barack Obama and German Chancellor Angela Merkel condemned what they called "barbarous" Russian and Syrian regime airstrikes on Aleppo during a phone call Thursday, the White House said.

Self-driving Tesla car hits bus on Autobahn
A Tesla Model S on autopilot. Photo: DPA / obs / ADAC

Questions about Tesla’s self-driving cars are now being raised in Germany after an accident on Wednesday.

Lion shot dead at Leipzig Zoo after breaking out of cage
Motshegetsi (l) und Majo. Photo: DPA

A young male lion was shot dead at Leipzig Zoo on Thursday afternoon after he broke out of his enclosure.

EU takes Germany to court for 'discriminatory' foreigner toll
A sign that reads "toll" along the Autobahn by Rostock. Photo: DPA.

The European Commission on Thursday said it is taking Germany to the EU Court of Justice because of the country's plan to impose a road toll that would mainly charge foreign drivers.

After 3-year trial, suspected neo-Nazi terrorist speaks out
Beate Zschäpe. Photo: DPA

Beate Zschäpe, the only living member of an underground neo-Nazi cell accused of murdering ten people, has spoken to the court in Munich after three years of silence.

Sponsored Article
The Inner Circle: the secret to dating in Berlin
Germany's 10 most Instagram-able places
Sponsored Article
Why Jordan is the ‘Different’ East
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
Sponsored Article
Retiring abroad: ensuring your health is covered
10 pieces of German slang you'll never learn in class
Seven great reasons to stay in Germany this September
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Sponsored Article
The Inner Circle: the secret to dating in Berlin
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
Germany's 17 Olympic gold medals in pictures
14 facts you never knew about the Brandenburg Gate
Ten times Germans proved they really, really love beer
Six things you need to know when moving to Germany
These 10 little-known German towns are a must see
German scientists prove birds can sleep while flying
London v. Berlin: Which is better for startups?
13 mortifying mistakes German learners always make
jobs available
Toytown Germany
Germany's English-speaking crowd