Wirecard - German corruption comes to bursting point

There’s a magnificent lightning storm outside and thunder is roiling in the valley, I have a packed and frantic day ahead anyway and last night at about 9pm to cap it all the crew who had been working since dawn to get the hay in were standing abjectly at my front door. When wrapping the vast hay-balls in the flat field above my back meadow, one of the bales had taken off down the hill and smashed a corner off my barn roof. OK. I’ll deal with that as dawn comes. But with regard to the Wirecard fraud story, I hope you’ll forgive me for re-posting a 2019 post -

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30th April 2019
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.
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Ends

Siemens, VW, DB and all the other past disgraces and now Wirecard. But why has it taken 14 months since Matthew Lynn broke the story (carefully) in the ‘graph? Germany’s business culture stinks like week-old Mackerel, and the Autumn will see an overflowing of the German corruption cesspit as the Covid recession bites far deeper than the bubble-bursting I was expecting when I penned that piece. You’ll need your facemasks – the stench will reach every corner of Europe.