Prosecutors in Athens have unveiled more details of alleged bribes paid by German companies – including state-owned railway company Deutsche Bahn – to secure lucrative arms contracts in Greece.
As lawmakers in Athens debate the latest ultimatum on austerity measures, which will hit the Greeks in the pocket and spell out years of increased taxes and welfare reforms, Germany has been accused of being complicit in the very corrupt practices that Greece is now being punished for.
— William Hayes (@gr8wightweh) February 17, 2014
Germany has been highly critical of Athens over its lax system of fiscal governance, poor tax regime and its unsustainably generous pensions system. However, it has come in for criticism for knowingly using Greece’s culture of corruption to its own advantage.
The level of corruption in Greece over a period of decades has been unraveling over the past ten years, as more witnesses have come forward to give Greek prosecutors evidence of back-handers paid in return for lucrative defense and other contracts.
Tanks for the Money
In 2009 alone, Greece spent $9 billion on defense – the equivalent of 3.5 percent of GDP. According to the World Bank, between 2010 and 2014, Greece spent between 2.2 and 2.7 percent on defense – well in advance of the NATO target of 2 percent.
According to the UK-based Private Eye magazine, on paper, the Greek army has "more tanks in service than the armed forces of Germany, France and Britain put together."
Its profligate spending was allegedly encouraged by German companies, including Siemens, Daimler-Benz, Rheinmetall and the state-owned Deutsche Bahn.
In March, the German newspaper Bild reported that Airbus' Eurocopter helicopter unit was alleged to have paid $45 million in bribes to Greek officials to secure a contract for NH-90 helicopters and German defense group Rheinmetall, STN and Atlas Elektronik paid $68 million in bribes for submarine contracts.
In August 2012, the UK Daily Telegraph reported that the Greek finance ministry had announced it had signed a settlement with Siemens that "achieves significant financial benefit and the benefit to the real economy." The newspaper said:
"The deal formally settles long-running allegations that Siemens used bribery to secure a raft on contracts for the Athens’ Olympic Games in 2004. It was signed by Greece’s finance minister Yannis Stournaras last week, according to a notice on the Greek treasury website."
According to the newspaper Süddeutsche Zeitung, in 2013, a subsidiary of German state-owned rail operator Deutsche Bahn paid up to $346,000 in bribes over ten years to win contracts in Greece, including the construction of the Proastiakos suburban railway connecting Athens International Airport and Corinth south of the capital.
In 2010, the German car maker Daimler pleaded guilty to corruption in the US and agreed to pay $185 million over charges that it paid millions of dollars of bribes to foreign government officials in at least 22 countries, including Greece.