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.