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Comment by xchaotic | Hacker News Reader

As one person in Germany explained to me - there is no corruption at the low level - it is not worth it for the policeman to lose a nice salary and a pension for a few hundred euros bribe. So you will get a speeding ticket everytime and Germany is known for that sort of 'solidity'. On the higher end, however, the stakes and balances are different - high pay is frowned upon and owners of Aldi supermarkets etc are known for their frugality and driving second hand cars. So if one wants to make big money - it needs to be under the radar, possibly illegal and bribes for big infra projects are common.

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I'd would rather say: a) Incompetence instead of curruption. Plus b) trust culture as entry-vector.

a) It has been bemoaned on many instances regarding Germans and finance: We're just inapt when it comes to knowledge about finance. Teachers unions fight tooth and nail to keep finance and business acumen out of the curriculum. This (itself being rooted in culture) will have to bear fruit in some way or another. Eg. Germany has the lowest share of people invested in equities of all industrialized nations. Even with negative interest rates, people rather use savings accounts than "risky" products with yields above 2%. And then there is real estate…

So it is no wonder to me that a state-agency is even easier fooled than E&Y was. Afterall (regarding leaked chats of Eno Kurniawan), they internally boasted about "brainwashing" the E&Y guys.

b) after all, what short-cuts our lack of understanding most of the time, is that we assume there is no wrong doing in the first place. So Markus Braun, claiming everything is fine until the very last minute seemed plausible. Even after the news broke on Thursday it seemed plausible for many, that the wrong doing was on the side of some Philippinian actors only.

> Eg. Germany has the lowest share of people invested in equities of all industrialized nations. Even with negative interest rates, people rather use savings accounts than "risky" products with yields above 2%

That is mostly to be blamed on savings accounts being decent in interest until the 2008 financial crisis while at the same time, especially in the dotcom boom, a lot of money was destroyed in the stock markets. The "Volksaktie", today known as Telekom (yes, this Telekom, for the US folks), wiped out a lot of people's savings and they remembered this.

I disagree.

- Returns of Savings accounts were better accross the industrialized world back then.

- The amount of people investing in equities was low before the "Volksaktie". It only declined thereafter even throughout the latest, longest bull-run in history.

But yes, events like the dot-com bubble or now Wirecard just strenghten the prejudice Germans have toward the whole topic.

Germany's economic model in the late 19th century, one copied by East Asia, was to force savings into banks, and then give out loans at heavily subsidised rates to well-connected industrialists.

This model has never stopped. Equity markets have never really existed because they are competition with the banking system. And the banks are heavily supported by (or owned) government. They have always paid a rate significantly under market. Always.

Germans have the same median net wealth as Greeks and the highest level of wealth inequality in the world (bar China). This is part of the system. If savers take their money out of banks, it is over (and btw, most German banks are functionally insolvent...they were the biggest buyers in pretty much every meltdown in the past fifteen years).

Germany is a developed economy but it's financial markets/banking system is Chinese (unsurprising because China copied Japan and Japan copied Germany). Savers get utterly screwed, the wealthy are eating their lunch.

E&Y simply had no interest in losing a customer by reporting what was well known to them.

So now, if you want to cook your books, E&Y is the auditors to go to?

Well, after that pustular bubble burst they've got rotten egg on their faces.

I didn't say EY was alone.

It is also relevant that a good chunk of the ultra-rich in Germany came to prominence with govt assistance (that varies from slave labour to heavily subsidised loans).

Aldi is a pretty poor example because they are an example of a company that actively disrupted German corporate life.

So being understated is a north European characteristic but that isn't why German billionaires behave that way (they are often extremely overstated in private). They have no public profile because the way they made their money is usually horrific (Oetker family, Quandts, etc.), there are always vague suggestions of corruption, and they are very rich but aren't capitalists...it is crazy.

Also, the amount of corruption in Germany is huge. The most similar country is probably China. The state is run by and for billionaires. There is almost no oversight of this. The purpose of the German economy is to steal from consumers: low wages, forced savings, essentially free loans from state-owned banks to well connected companies, very weak unions. Not as bad as China, stuff like hukou is...fedualistic, but unlike almost any other developed economy.

Germany and weak unions? Lol, I get they're not as solid as French unions where bossnappings and violent riots are the norm not the exception, but still. We have legally protected unions and employee councils ("Betriebsrat"), the US and many other countries in the world do not have these at all.

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