Something rotten in the powerhouse

VIEW FROM BONN
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The Independent Online
Germans would be very worried if they had nothing to worry about. Luckily, though, they can relax. There is, for the moment, no danger that they will run short of promising gripes. The events of recent weeks have given excellent material for apocalyptic analyses, which conclusively demonstrate that things are unutterably awful - and, best of all, that the worst is yet to come.

Above all, Germans have been shocked to discover that their sometimes Portillo-ish view of the world - "Foreigners are corrupt; we are squeaky clean" - belongs strictly in the "Fantasy" section. This ought to have been self-evident, from the start. Apparently, however, it was not.

The exposure of a huge alleged corruption scandal at Opel, the German arm of General Motors, has caused dramatic headlines. Millions of marks are said to have been illegally funnelled back and forth, in cash and favours, in what the weekly Stern magazine describes as an affair that is "without parallel in post-War German history". As in one of those implausible Grisham-style thrillers, where the cover-up always stretches to The Very Top, it seems that everyone was at it, in a remarkable web of corruption. Around 200 people are being investigated, including more than 50 Opel employees. Among these are some of the company's current and former managers, including several former board members. Peter Enderle, Opel's production director, has been suspended on indefinite leave.

The various alleged scams included suppliers who built houses and did other expensive work for Opel employees, with the bills going to an unsuspecting Opel. Massive bribes, too, are alleged to have been paid. The affair was brought into the open by one of Opel's suppliers, who finally rebelled. According to one of the prosecutors, the investigation is "like an avalanche."

The Opel affair is dramatic enough, with new allegations appearing almost every day. Opel itself called in the police to investigate the corruption. None the less, the revelations have been deeply embarrassing to Opel, too - not least because of the accusations of dirty tricks that Opel hurled at its great rival, Volkswagen, only two years ago. VW's alleged tricks - which involved illicit access to confidential Opel plans and information - left Opel self-importantly occupying the moral high ground. That makes the recent fall all the more poignant.

But the Opel revelations have generally been seen as merely a symptom of something much wider. The weekly Der Spiegel talked of the "culture of corruption". Others, too, made it clear that they saw Opel as only a small part of the bigger story. The main front-page headline of Die Woche talks of "The sweet poison of corruption", and devotes four pages to the subject of corruption in Germany. Die Zeit, too, headlined its Opel story: "Palm-greasing, instead of doing sums." It, too, concluded: "Opel is only a symptom." Der Spiegel ran a graphic which appeared to show that Germany was - shock horror - behind Britain in the corruption league table.

Hans-Olaf Henkel, president of the Federation of German Industry, took the opportunity to warn Germans how low they could sink. "We have seen what corruption has done in other countries - and we must act now, so that we do not get into a similar situation." Die Zeit pointed out that Germany must abandon its preferred self-image, as "an island of saints, where loyalty and honesty rule". The paper noted: "Although the detective thriller involving Opel will no doubt bring some more surprises, the case has already badly damaged the idea that corruption is the exception here."

Nor is it just corruption which makes everybody depressed. Germany has been worrying about its own economic performance, too, even when it is clean. Partly, this is because of the strength of the mark. Everybody else worries because their currencies depreciate against the mark. But Germany, heavily reliant on its exports, does not like to be left out of the worrying game, and constantly worries about the fact that its currency is so strong. With some reason, it must be said - as the case of Daimler- Benz has clearly shown.

Daimler-Benz remains a source of national pride - "the good star of the German economy", in Die Zeit's phrase. When the Chinese president, Yiang Zemin, dropped in to say hello last week, contracts worth DM1.4bn (pounds 636m) were duly signed. But Daimler-Benz has also dramatically run into difficulty, not least because of the strength of the mark.

In particular, Daimler-Benz Aerospace has suffered, since its products are manufactured in marks but priced in dollars. As a result, Daimler- Benz, which had originally been predicting a healthy profit in 1995, is now talking of severe losses of DM1bn upwards for the year.

But, despite the dark news from Stuttgart - matched by an unsurprising plunge in Daimler-Benz's share price - it would be wrong to take all the pessimism at face value. Gloom-and-doom scenarios are a part of German economic life. The economy is always about to be shipwrecked. And yet, the ultimate disaster always seems to be avoided. On past form, at least, German industry always finds the strength, in the end, to adapt and survive.

Germany looks constantly to the rising Asian economies, and (rightly) fears for its own international competitiveness. Within Europe, however, its dominant position remains unchallenged - however much some German analyses seek to dodge that obvious truth.

One sign of the underlying national self-confidence - despite all the mumbling and grumbling - is the popular fear of European currency union, which is now becoming increasingly clear. Opinion polls suggest that almost two-thirds of all Germans are opposed to a single currency - not least because they fear that their beloved mark would be weakened. Nor is industry, traditionally more sympathetic, necessarily raring to go. Hans-Peter Stihl, president of the German Association of Chambers of Commerce, recently warned against racing ahead too fast towards currency union, insisting: "The latest turbulence on the currency markets showed that the introduction of a common currency will take longer than previously planned."

In short: steady as she goes. Germany no longer seeks to be so different from everybody else. It is just as corrupt, not astonishingly efficient, and (most shocking of all) not even wildly pro-European.

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