The stench of corruption from Germany's businesses

Back in April 2018 we ran a fairly lengthy piece on German corruption. The German government had in effect encouraged widespread business corruption with law changes that made it easy to get away with - and for the past decade, it has been pervasive, deep and substantial. We quoted a report that found

A staggering 43 percent of German business executives polled by EY (formerly Ernst & Young) think bribery and corruption are fairly commonplace in Europe's economic powerhouse. That's a big jump from just 26 percent in 2015.

So who cares if most of German business is bent, the nation's judicial system ranks with Greece in terms of probity, shareholder protection is amongst the lowest in the developed world and there is little creditor protection? Who cares that courts and lawyers are beyond the reach of most victims, who must passively take the hits from German corrupt dealing?  Well, we wrote

This deep and endogenous German economic corruption will not play well in the rest of Europe. The UK, the Netherlands and the Scandinavian nations, with low levels of corruption and high scoring of commercial rectitude and probity, will be feeling fouled by contact with German corruption - and will now be adding up the commercial losses that German crookedness has cost them. The southern nations will be aggrieved that they have been bullied, coerced and hectored by a deeply crooked nation wearing a false disguise of moral superiority. And eastern nations such as Poland and Bulgaria, countries Germany has robbed of billions of Euros in corrupt complicity with Gazprom, will be looking at concrete measures to get their money back.

Yesterday Matthew Lynn broke yet another tale of German corruption in the Telegraph. The latest scandal is fraud at Wirecard - a rapidly ascending start-up that replaced the moribund Commerzbank in Germany's DAX index. The Telegraph and the FT are reluctant to be too specific; one suspects m'learned friends are hovering, and even the linked piece in the Anti-Corruption Digest is careful. Lynn writes

We have an image of Germany as a very law-abiding country, and on one level that is certainly true. The streets are safe, and no one can pay a bribe to get out of a parking fine.... yet right at the top of the country’s biggest companies it is starting to look painfully obvious there is an honesty issue.

The Germans are fond of portraying themselves as the exemplars of responsible, socially conscious capitalism. In truth, however, the hypocrisy is starting to become nauseating. There is clearly something rotten within Germany’s business culture – and even worse, no one seems to want to do anything about it.

It is the sort of casual, 'who cares?' corruption that saw Martin Selmayr's crooked appointment to EU capo shrugged off and Germany's biggest industrial names reduced to international gutter reputations no better than bootlegging prohibition gangsters.

So don't be surprised that when the downturn begins to bite, the entire German commercial edifice comes tumbling down - and the German economy proves as much of a paper tiger as did Soviet military might in 1989.

We must plan Germany's survival

The sheer aggression and hatefulness exhibited in spades by Brussels over Brexit - including words and actions that would not be inappropriate if directed at an enemy in war - have been borne with remarkable tolerance by the British people. But the impact of this louche, amateur, vulgar and unstatesmanlike behaviour has not been lost on the country. When Germany sent us Ribbentrop, pumped with hubris and vanity and claiming a Waltish 'von', he was dismissed by the British as a champagne salesman. Now we are sent a stumbling comical drunk, an angry little Polish dwarf who can't control his mouth and a sinister German Grand Vizier, every one of them ill-mannered, dishonourable and untrustworthy. Just more champagne salesmen. Is Europe so impoverished of talent that from a population of 430m it cannot produce three persons with any vestige of international class or even basic diplomatic competence?

It is important that we overcome our dislike of this unattractive and boorish shudder of clowns, for it is becoming clear that Germany is increasingly in trouble and it is more and more likely that we must assist in her survival in the months and years to come. Mogenthau was wrong then and any revivalists of his inane retribution are mistaken now. We might need another Marshall Plan, and this time we might have to do it without the USA.

Germany is horribly exposed to Italian debt and risk of default. Two of her largest banks, Deutsche Bank and Commerzbank, are not only on the ropes but slipping unconscious from the ring. With the Eurozone now slipping inexorably into recession, the fall of these giants will reverberate throughout Europe.

Germany's auto industry is a late 20th century rustpile. The diesel emissions frauds, crash in diesel sales, Brexit and US tariffs will be a hammer blow to Germany's car plants and the EU-Japanese trade treaty will halt and reverse any compensating Japanese direct investment, for the same reasons as Honda closed in the UK.

The globalists have hoodwinked the Germans into taking a million migrants - to become two million once they have established themselves and dependents join them - on the false and spurious grounds of 'demographics' - an ageing population no longer capable of standing on the production line. These same globalists must have known what is now in the public realm - that Germany will see some 37% of jobs going in the next 15 years as the effects of AI bite. The UK's figure from PwC is 30%. Training a million migrants in basic numeracy and literacy is one matter; retraining twenty million Germans in computer skills is another. My resentment of the loathsome Peter Sutherland is renewed each time I read his weasel words to the HoL select committee in 2014. The real reason for these migrants, as he makes clear, is to help destroy German national identity and cultural congruence

"If one looks at the key arguments and issues relating to the need for migration, the demographic is the most fundamental for many countries of destination. The demographic challenges in a number of European Member States, however difficult it may be to explain this to the citizens of those states, are absolutely unquestionable. They are vital in terms of a crucial dynamic for economic growth. A declining and ageing population is destructive of prosperity—forgetting entirely about the moral aspect of migration. That is particularly relevant to a number of countries in central Europe—Germany has a major issue—and some southern Member States. So demographics are a key element of the debate, and a key argument for the development of—I hesitate to use the word because people have attacked it—multicultural states. It is impossible to consider that the degree of homogeneity which is implied by the alternative argument can survive, because states have to become more open in terms of the people who inhabit them, as the United Kingdom has demonstrated."

In terms of electric vehicle technology and battery production, Germany is lagging behind the rest of the world. It is unlikely that she will be able to recover her lost lead in auto-technology for the years ahead.

German manufacturing has sunk to a six-year low. Jan von Gerich of Nordea Bank called the German manufacturing economy 'scary'

The bad news is that there are no signs that the weakness in the more cyclical German manufacturing sector would be temporary, and the outlook is frankly scary. In light of these numbers, it is crystal clear that the challenges currently facing the German economy go well beyond the car sector.

All the signs are that Europe's largest economy is sleepwalking into disaster. It may be that a change of Chancellor, a fresh administration and a range of new voices breaking the stranglehold of the old political elites on Germany's various parliaments, national and state, will head-off disaster, but we cannot bank on it. A stable and democratic Germany tied strongly to France is the guarantee of peace and security in Europe - and we must be prepared to step in to assist if Germany, once again, fails to find her own way.

How endemic is German corruption? - Europe's crooks trample on legality

The rise of German economic corruption appears to have two phases. From the turn of the new century to 2012 / 2015 low level economic corruption became endemic throughout Germany as German manufacturing and industry expanded output and sales. A change in German law in 1997 had allowed prosecutors to investigate corruption proactively - previously firms had to report themselves. However, authorities were also then starved of resources to investigate and bring corruption actions - in effect giving official German government approval to allow corruption to flourish. As a consequence of this official 'fair wind', industrial giant Siemens distributed over €400,000,000 of bribe money to secure bent deals around the world.

As the New York Times reported in 2007:

Wolfgang Schaupensteiner has never been so busy. From an office in central Frankfurt that is decorated with cartoons about corruption, Schaupensteiner has headed the tiny financial crime unit for this city, Germany's financial capital, since 1993. These days, his backlog of bribery, fraud and other white-collar crime cases runs into the hundreds, and he says he has a simple explanation for it.

Corporate profits have surged across sectors ranging from finance to autos to energy, as German executives have turned the country into one of the world's largest exporters over the last five years. Illicit dealings helped create their success, he asserts, and that in turn has encouraged many executives to believe that crime does pay.

On Wednesday, prosecutors in the southern city of Nuremburg raided multiple locations of the offices of Siemens, one of the country's most prominent companies, on suspicion that certain bribes may have been concealed as payments for services that were never provided. In recent months, DaimlerChrysler, BMW and Volkswagen have also been raided, put under investigation or even had employees taken into custody. "Globalization has become a motor for corruption in Germany," asserted Schaupensteiner, 58. "It creates dangerous potential if you do not control it."

More recently, in 2017 Ernst & Young investigated the extent to which corruption has become embedded and institutionalised within the German economy. This second phase roll out of German corruption proved as insidious as an invasion of Japanese knotweed, with crooked tentacles reaching into every crevice of German economic life. The rapid growth of online trading in Germany in the last five years has exacerbated the criminality - German firms trade corruptly and criminally with impunity on the internet as the German legal system provides few affordable remedies for their victims. And all this is done with the complicity and support of the German government.

A staggering 43 percent of German business executives polled by EY (formerly Ernst & Young) think bribery and corruption are fairly commonplace in Europe's economic powerhouse. That's a big jump from just 26 percent in 2015.

In Germany, 23 percent of the managers polled admit they would act in an "unethical manner" to move up the career ladder or secure higher salaries. Roughly 10 percent of German executives polled wouldn't rule out deliberately providing false information to others to help their own careers and fill their pockets.

"VW's emissions-cheating scam, the Libor rate-rigging scandal, and [unlawful] collusion among companies as well as a raft of compliance violations have made the headlines quite frequently of late," says Stefan Heissner, who heads EY's Fraud Investigation & Dispute Services division.

He adds that stricter compliance rules that have appeared in the wake of major corporate scandals have not really changed the perception of widespread corruption in Germany.

Whilst Germany is not alone in seeing a rise in economic corruption, the country is unique in being able to roll it out on an pan European industrial scale, leading an entire continent in implementing then covering up emissions testing, and now corrupting the trade in two-thirds of the continent's gas imports. The corrupt appointment of the German zealot Martin Selmayr to the heart of the EU raises suspicion that the repression of the truth and blocking of all measures to tackle corruption has begun with a German takeover of key appointments. Germany's scoring on independent international indices was summarised by a correspondent in response to the post below; 

Unlike the EU the UK does not attack commercial competitors using the legal system: the EU attacks companies like Intel, Google/Alphabet, Microsoft, Amazon, Chrysler, Fox, Facebook, Starbucks, Apple, Sony et al by using antitrust charges to further the interests of Eurozone technology companies.

Circa 2016 - in terms of shareholder protection the UK is 4th in the world behind Hong Kong, New Zealand and Singapore: France is 29th: Germany is 49th.

In terms of creditor protection: Germany is 28th: France is 79th.

No other EU country can match the UK on Rule of Law: the UK is 3rd in the world for property rights protection: 2nd in the world for Investment Freedom: 3rd in the world for Financial Freedom. As The Wall Street Journal’s Jon Sindreu has noted: “most international financial contracts are written in English law.”

The World Ranking of Judicial Independence cites: UK 6th - Rwanda is 23rd, Germany 24th, France 28th, Saudi Arabia 30th, India 53rd, Spain 58th and Italy 65th.

The EU is like Volkswagen writ large: when they can’t hack it – they crook.

This deep and endogenous German economic corruption will not play well in the rest of Europe. The UK, the Netherlands and the Scandinavian nations, with low levels of corruption and high scoring of commercial rectitude and probity, will be feeling fouled by contact with German corruption - and will now be adding up the commercial losses that German crookedness has cost them. The southern nations will be aggrieved that they have been bullied, coerced and hectored by a deeply crooked nation wearing a false disguise of moral superiority. And eastern nations such as Poland and Bulgaria, countries Germany has robbed of billions of Euros in corrupt complicity with Gazprom, will be looking at concrete measures to get their money back.

Frankfurt may attract a few McMafia Russian banks, a BCCI or a handful of Ponzi scammers, but chances now that any reputable international financial institution would want to be mired in the filth of institutional German economic corruption are slimmer than ever.

German corruption will rot the whole EU fish

Fish they say rots from the head. The Telegraph details an explosive leak of documents (£) from the EU itself detailing EU collusion in illegal Gazprom trade terms - the analysis of which I'll leave to our valued and wise colleagues over at Capitalists at Work - it emerges that Germany enjoyed Russian gas at up to half the cost of her poorer neighbours, and it's suggested that this sweetheart deal kept a lid on the whole corrupt and secretive arrangements for so long, arrangements that beggared Germany's neighbours. It also helps explain Germany absenting herself from both European and international sanctions and other measures against Russia.

Institutionalised German corruption is a new idea. Those of us who've always thought of Germans as upright rule-followers obsessed with their stools may have to revise our opinion of them to Italians with a savings habit. The Volkswagen emissions scandal - again, a German leading role given the scale and value of German car production - was also known about throughout Brussels. But we've always known that the EU is irredeemably corrupt. And Martin Selmayr, the Federast High Priest, most recently appointed corruptly as head of the EU's civil service giving the corrupt Germans one of their own at the heart of the EU. 

Germany scores low on international indices of commercial rectitude. Her courts are corrupted and she scores lower than many second-world nations on WEF indices. But the main problem with German corruption is that they're so damn efficient at it on such a large scale - they've industrialised it. An entire continent's car production, an entire continent's gas consumption, both fouled by deep rooted and well-organised national corruption. And no, the French or the Spanish or the Italians would not have done it if Germany hadn't cheated and manufactured a cover up. 

That Germany's corruption is known and supported not only by the German government but by the whole EU is evidenced by the utter absence of criminal actions flowing from the diesel scam. This was not a victimless crime. Whatever the rights and wrongs of the emission standards, the facts are that car makers lied and cheated and as a consequence millions of diesel owners have effectively lost money - in some cases many thousands. So far the only car executive to face jail time is a German Volkswagen VP who failed to escape from the US in time. 

The EU has only one member that comes close to the UK in terms of low corruption, business rectitude, judicial independence and other Transparency and WEF criteria and that's the Netherlands; in many cases they score better than the UK. No surprise. The Dutch have long been both valued and admired as allies and rivals. Fish rots from the head, and the EU's uncontested head right now is Germany. If German corruption and hegemony is unchallenged, the EU will putresce. However, if a combination of the Netherlands and the Visegrad group move to wrest power from a sclerotic and corrupt Franco-German grasp, the UK may enjoy the benefits post-Brexit of a reformed Europe.  

German Nordstream II investors running scared

The unexpected inclusion of sanctions measures against Euro firms assisting Russian energy exports in a Bill supposed to penalise Iran in the US has caused panic amongst the Euro corporates. The Local reports that Merkel's spokesman said that she 

'shared the concerns raised by Germany's Foreign Minister Sigmar Gabriel and Austrian Chancellor Christian Kern who charged in a joint statement on Thursday that the measure brings a "completely new and entirely negative quality to European-US relations". In a hard-hitting statement, the German and Austrian said they "cannot accept the threat of extra-territorial sanctions against European companies that participate in the expansion of European energy supplies" adding that this would "violate international law". They accused Washington of using the sanctions to squeeze Russian gas supplies out of Europe in favour of US energy exports. "The aim is to secure jobs in gas and oil industries in the US," said Gabriel and Kern.'

The major panic seems to be with the Nordstream II  scheme - owned by Russia's Gazprom but with substantial investments from Uniper, OMV, Royal Dutch Shell, BASF's Wintershall and Engie. All now face penalties wherever Trump's administration can reach them. 

Nothing to do of course with the EU's signalled intention to fine Google €1bn this year, of course, and if US penalties equal this figure it will be purely coincidental.

Watch out BMW and Audi ...

Economic war with Germany heats up

AEP in the Telegraph this morning says it all:-

(Berlin) demanded that Britain desist from tax dumping and financial deregulation that would “jeopardize the stability of the union". This demand is almost insulting. British regulators have led efforts to recapitalize banks. It is the eurozone and Germany that have dragged their feet on tougher capital rules.

There is no longer any attempt at diplomatic tact. The document states that the European Commission will "determine" when the UK has made "sufficient progress" as it jumps through the hoops, the way it handles accession talks for supplicants hoping to join. It reads like an imperial curia discussing a colony.

........ What is clear is that if the final document presented to Britain looks anything like the EU papers circulating this week, no sovereign state can accept it.

Sigh. Like the same-old same-old. Like the demands presented by Austria Hungary to Serbia in 1914, Germany's demands are impossible for the British realm to accept. Not even the softest, most accommodating Brexit negotiators could accept such national humiliation under the heel of the Hun. 

I fear it will be full blown economic warfare. 

This is an economic battle between Britain and Germany

It is becoming transparently clear that Brexit is an economic battle between Britain and Germany. It is also becoming clear that EU membership is costing us way more than the headline contributions, before or after rebate. One of the EU's several Presidents, Herr Tirana, repeated yesterday in effect that they're so desperate for our wealth that they encourage voters to overturn Mrs May so we may repent and continue to bleed our nation's life blood for the vampire squid.

Germany knows the lead that a fractional advantage in GDP growth can produce over a decade. Yep, one nation grows at 1.1% and another at 1.6% and it doesn't sound much until you look at the lead after 20 years - 13% for these figures. That's been Germany's game plan since the 1970s - free riding NATO, skewing the rules, manipulating EU budgets and quiet economic sabotage to ensure their GDP growth is greater than ours. And now they're furious, they're incandescent with rage that they've been found out and that we're leaving. By doing so we ensure that our GDP takes the lead - not only will Trump make them pay an extra 1% of GDP to NATO, but they must pay 25% of the EU's budget from 2019 or see it unravel.

Hence the bullying, the threats and the attempted intimidation; we must pay €60bn, we must submit to the German European Court until 2030, we must follow their instructions. It's becoming clear that we won't do any of it, that we will walk away. So be it. Alone and ahead.

Germany deeply resentful of Trump Presidency

If you thought the snowflake whining in the US and UK reached a pitch of irritation yesterday at Donald Trump's inauguration, this is as nothing compared to the wailing, gnashing of teeth and rending of garments in Germany's government districts. Der Spiegel devotes an entire issue to Trump-hate and Trump-fear with no equivocation whatsoever - they make the post-truth Guardian look balanced. "Trump is the end of the world as we know it -- that much is clear", states the paper boldly. Trump's presidency is a particular problem for Germany for the following reasons;

• Trump has previously identified Germany and Japan as the most prominent enemies of US manufacturing - "Our 'allies' are making billions screwing us" - blaming high state subsidies for aiding product development while free-riding on US defence expenditure. 
• Trump knows that the EU is basically a vehicle for German hegemony and allows the sort of economic imperialism that enriches Germany at the expense of the southern states; he doesn't see this as a good thing
• Germany leads Europe's demonisation of Russia. Quite why Germany fosters such hostility is a puzzle; she is safer from Russian military threat than at any time since 1949, yet still bullies the rest of the EU in maintaining sanctions when many EU members - notably the eastern nations and Austria - want to wind them down. Without strong US backing, Germany fears the EU will fracture on the sanctions issue, and Trump is no fan of the sanctions
• On NATO and defence, Trump has made it clear he will not support the EU's free riding, and Germany will have to spend far more on her own defence. Add to this the lunatic narcissistic folie de grandeur in a Brussels that wants its own independent army and Trump's scepticism as to Germany's motives and it's clear a crisis is coming
• The EU is planning to throw a huge 60th birthday party for itself in Rome in March - at a time when the UK is submitting Article 50 notification. Germany fears this could be the zenith of the EU's growth; Trump sees the reason for the EU is as an economic rival to the US, and he will try to split EU nations to weaken the risk. Already eastern nations in tune with Trump ideology are gaining confidence at defying German hegemony, and Berlin fears this will grow
• Trump's direct criticism of Merkel's migrants policy and his identification of Islam as the greatest threat to western civilisation undermine Germany's policy of destroying European national identity to create a homogeneous consumer mass with no allegiances for the benefit of the global corporates. Germany fears that the resurgence of both American and British patriotism will encourage the EU's satrap states to rediscover their national identities.

Underlying all of this is a deep existential angst that America is now challenging the illiberal consensus of central State control, bullying and coercion. The very last thing that administrators such as Merkel want is a reversal of the policy so eloquently catalogued by Brendan O'Neill:-

It happened because you banned super-size sodas. And smoking in parks. And offensive ideas on campus. Because you branded people who oppose gay marriage ‘homophobic’, and people unsure about immigration ‘racist’.

Because you treated owning a gun and never having eaten quinoa as signifiers of fascism. Because you thought correcting people’s attitudes was more important than finding them jobs. Because you turned ‘white man’ from a description into an insult. Because you used slurs like ‘denier’ and ‘dangerous’ against anyone who doesn’t share your eco-pieties.

Because you treated dissent as hate speech and criticism of Obama as extremism. Because you talked more about gender-neutral toilets than about home repossessions. Because you beatified Caitlyn Jenner. Because you policed people’s language, rubbished their parenting skills, took the piss out of their beliefs.

Because you cried when someone mocked the Koran but laughed when they mocked the Bible. Because you said criticising Islam is Islamophobia. Because you kept telling people, ‘You can’t think that, you can’t say that, you can’t do that.’

Because you turned politics from something done by and for people to something done to them, for their own good. Because you treated people like trash. And people don’t like being treated like trash. Trump happened because of you.