21 ms·

The Origins of the Wirecard Scandal

Haga 5y ago
The origin is a stagnant culture desperate to emulate the success of the valley, but unable to copy the culture that created said success, opening doors wide for con men.
durnygbur 5y ago
The German anti-English sentiment is sometimes right. They're not afraid to point out omnipresent Anglosphere oligopolies - in payments (Visa, Mastercard), in social networks (Facebook, LinkedIn), in surveillance (Google, Facebook), in mobile (Google, Apple). While the rest of the Europe entirely submits to these oligopolies on a promise of receiving "investment". Funny though how Germans turn blind eye on their own oligopolies dominating and devastating European markets. Part of the problem is that German economy is ruled by industrial and media moguls. For them internet is whether "stupid websites", a medium serving copyrights violations, or legal compliance issue (see "Impressum" hysteria). Either way an issue rather than opportunity. With their geriatric population the strategy is basically - increase public media fee, 50mbit copper internet in every household, internet for broadcasting public media content while throttling any alternatives.
- apples_oranges 5y ago
  I have the feeling that separation of powers tends to be stronger in the US. But maybe it's false..
  - michaelscott 5y ago
    I don't know if it's intentional separation of powers. The American culture is very individualistic, especially compared to the German. This just naturally means that American companies tend to "go it alone" in relation to the public sector for longer than they would in Germany. Certainly when American companies get to the right size they seem to become much closer to the political bodies that matter to them and their interests, as is the case likely everywhere
    - ChuckNorris89 5y ago
      >The American culture is very individualistic, especially compared to the German. I wouldn't rush to this conclusion. US billionaires usually run many charity funds whereas German billionaires rarely do anything like that. Also, German businesses owners don't seem to mind exploiting people's health and the environment (VW emissions scandal) or foreign workers [1] if it makes them money, so I think the same issues that plague capitalism in the US (greed) affect Germany too. Otherwise, the wealth gap between rich and poor wouldn't be rising so steeply in Germany [2][3] if they wouldn't be so individualistic. [1]https://m.dw.com/en/germany-meat-industry-conditions/a-54033187 https://m.dw.com/en/germany-meat-industry-conditions/a-54033... [2]https://www.iamexpat.de/expat-info/german-expat-news/inheritance-and-coronavirus-are-increasing-wealth-inequality-germany https://www.iamexpat.de/expat-info/german-expat-news/inherit... [3]https://m.dw.com/en/study-shows-growing-wealth-inequality-in-germany/av-54412300 https://m.dw.com/en/study-shows-growing-wealth-inequality-in...
      - fh973 5y ago
        You can generalize that: German government doesn't mind exploiting people's health and the environment, and prioritizes industry interests. Two current examples: the ongoing ignorance about ground water pollution [1], and the Diesel air pollution affair, which is far from being over [2]. [1] https://www.dw.com/en/eu-sues-germany-over-water-tainted-by-nitrate-fertilizer/a-19225653 https://www.dw.com/en/eu-sues-germany-over-water-tainted-by-... [2] https://www.rhein-zeitung.de/deutschland-und-welt/wirtschaft_artikel,-umwelthilfe-beklagt-hohe-abgase-bei-dieselpkw-_arid,2246531.html https://www.rhein-zeitung.de/deutschland-und-welt/wirtschaft... (no English source)
      - luckylion 5y ago
        > I think the same issues that plague capitalism in the US (greed) affect Germany too. Definitely. It's a cultural thing, Germany (along with most Western countries) seems to follow the US in that regard. The individualism <=> collectivism scale is well studied, and there's a significant gap between the US and Germany. http://clearlycultural.com/geert-hofstede-cultural-dimensions/individualism/ http://clearlycultural.com/geert-hofstede-cultural-dimension...
- luckylion 5y ago
  > Funny though how Germans turn blind eye on their own oligopolies dominating and devastating European markets. Everybody wants sellers to compete when they're buying, nobody wants to compete when they're selling. > For them internet is whether "stupid websites", a medium serving copyrights violations, or legal compliance issue (see "Impressum" hysteria). The large corporations and media companies had issues with the laws around imprints? That wasn't my perception at all. Rather, it was average people who wrote blogs etc who didn't want to put their real name, home address and tax IDs onto their sites for various reasons, but the law was so vague that nobody was sure their site wasn't "similar to the press" or "with commercial interest". Larger companies didn't care at all -- they were generally compliant way before that law was introduced.
  - durnygbur 5y ago
    > Larger companies didn't care at all -- they were generally compliant way before that law was introduced. If you write anything on the internet you're publishing content, ie. media might start consider you a competition, certainly after achieving certain visibility. Why not create an easy way to shot someone down or to suck someone into an expensive time consuming legal swamp?
    - luckylion 5y ago
      Oh, I misunderstood your comment, I believe. I took it to mean that the companies got into a craze about new requirements, not that they were welcoming the new requirements as it gave them some/more control over online publishing (which is how I understand your comment now, please correct me if I'm wrong). I generally agree in that case, they were probably happy for that moat.
apples_oranges 5y ago
Germany has their share of scandals.. Volkswagen, Deutsche Bank, Sparkasse, other banks.. Wirecard.. but politicians of course had no idea.. afterwards they are all shocked and surprised.. sigh. Especially Wirecard.. is such a failure on so many levels. Lead me to the conclusion: 90% of people half ass everything. It's like "The Wire" all the way. I bet you even Google, Apple and Facebook half ass stuff.. it's just a facade of elitism at those places.. Places like EY. Being a consultant, I've worked at several such places.. it's 100% true. (but to be fair they also had their share of brillant people) So many people are pretending their way throughout their whole careers. While basically being incompetent.. or not giving a damn.. sigh.
- signal11 5y ago
  I had heard about the Wirecard scandal, but didn’t know the details. Having read the article now, I do wonder how Ernst & Young signed off on Wirecard’s accounts.
  - wereHamster 5y ago
    Money has been exchanged for services rendered.
- TGImemegen 5y ago
  Of course a lot of people half-ass stuff at FAANGs, they're only human (plus there's been enough scandals coming out of those places that it's no secret any more).
- deleted 5y ago
  [deleted]
- Glawen 5y ago
  don't forget the big infrastructure project like BER which entertained me a lot. A story I like particularly is the Phantom of Heilbronn (related to another big scandal: the NSU) which I think explain what is happening: Germans have a great confidence in them and other germans. They are very suspicious when something comes from outside Germany / Austria (like France, Italy, or UK), but if it is german it must be good and seriously done! Truth is, Germany also has a share of slackers and fraudsters doing half assed stuff, but they admit their failures and sins only when it has become overwhelming, leading to crazy scandals. I still remember my colleagues who were proud of VW when the dieselgate came out. They were completely shocked. VW did this! They were expecting this from the sleazy french and italian, but not from their own beloved german company.
Mashimo 5y ago
> When scandal happens, the country seems less interested in figuring out who exactly did what than in letting the old reflexes of collective guilt kick in. Ha. True. What a great read. Thanks for sharing. > A scandal like Wirecard is powered by the dream that you could have an Uber without slashing workers’ protection—that one could hold on to what remains of the German social market economy while at the same time going all-in on laissez-faire capitalism. ;_; let us dream and stop holding up a mirror in front of us.
pintxo 5y ago
Another aspect might be the often seen focus on the law, ignoring the policing aspect: "It's forbidden to do this by law, so we don't need to do X".
allendoerfer 5y ago
There are federal elections in September in Germany. CDU just fell behind the Green Party in recent polls and SPD (whose Olaf Scholz ultimatively was in charge of BaFin) is a shadow of it's former self anyway. I do not think the everything will turn for the better, but I am hopeful that some actions will be taken. The political style of Merkel - and Germany as a whole for that matter - of a steady hand and waiting for consensus to form to go with, will hopefully be ammended by some visionary ideas. I feel the German inferiority complex described in the article. I think it is partly built on a misunderstanding: Silicon Valley was not funded by smart engineers thinking in their garages. It was funded by massive military grants. The garages came later. Last time Germany gave out massive military grants it was sadly very able to compete technologically. Everyone knows, who worked on the rockets that ultimatively won the space race. German universities are indeed world-class. It's not like uneducated people can export this much. The university rankings do not take into account that research in Germany happens at Fraunhofer or Max Planck, which are door to door to their respective university and have shared staff. If all their papers would be taken into account, the rankings would change dramatically. Germany is capable and cold start investing massively. I think the article exactly gets it: We are just too comfortable. Acting like a big Switzerland might not be glorious but in the end I take a socially relatively cohesive country, where an illness or going to university will not bankrupt you, where your kids can travel alone in public transportation, where police shootings per year are single digits, where the air is very breathable and the tap water is drinkable over world leadership any time. We can always pump some billions into football or another sport once in a while and watch the nation win the world cup, if we really need to dominate something for no good reason, which is an obvious connection to national pride, the article missed out on.
- redis_mlc 5y ago
  > Silicon Valley was not funded by smart engineers thinking in their garages. It was funded by massive military grants. The garages came later. Well, not exactly: - Stanford U. was the US West Coast US military communications lab - but Shockley (1956) and HP Labs (1966) started in a storefront/lot and garage respectively. The military was just one customer, and both recruited researchers from Bell Labs. > I take a socially relatively cohesive country ... over world leadership any time. US hegemony allows the rest of the countries in its sphere to live in peace, while only paying half or less of their fair share in defense spending. You're welcome. Another post that supports my suggestion to ban European IP addresses from HN - just pointless drivel from the Old World. You know exactly what Russia what do to your German family and friends without "US dominance." https://en.wikipedia.org/wiki/Shockley_Semiconductor_Laboratory https://en.wikipedia.org/wiki/Shockley_Semiconductor_Laborat... https://en.wikipedia.org/wiki/HP_Labs https://en.wikipedia.org/wiki/HP_Labs
idownvoted 5y ago
Actually pretty accurate. > Karl Theodor zu Guttenberg There are many more such impostors, that fake their international standing to cater to the local audience: Our Covid-Expert Lauterbach, presenting himself as an Medical Professor from Harvard, while all he achieved there was publishing anopinion piece, which somehow got him tenured here, although said piece was kept secret for over a decade. > The spheres [of politics and business] are actually surprisingly separate Another thing us Germans routinely pride ourselves while simoutlaniously lambasting the US with: Our politicians just can't buy their campaigns off inherited/donated wealth. The downside to this: German politicians are usually unemployable individuals, because you cannot rise inside your party's ranks, if you have a proper job. They sport degrees in political science or law, with the latter one only used for law making not helping actual clients. Thus our leadership is prone for lobbying.
stewbrew 5y ago
Well, I don't think this article does a good job at explaining the scandal. It seems to me the author had a thesis and is mostly occupied with explaining that. What makes wirecard interesting are all these connections with politicians, oligarchs, secret services etc. Some day in the not so distant future, somebody will make a tv series out of this.
- FabHK 5y ago
  I agree that there are more salacious details that the author didn't really touch on (particularly concerning Marsalek), but I think the author's embedding of the scandal in the political and economic fabric of post-war Germany was quite well done. (Oh, and I do hope there'll be a TV series!)
- ajcp 5y ago
  > I don't think this article does a good job at explaining the scandal. I think that's because of their use of "origin". Both the title here and that of the article ("The Weird, Extremely German Origins of the Wirecard Scandal") can be taken two ways: 1. How the Wirecard scandal transpired I think this is what you took it to mean. Where "origin" means the beginnings of the scandal itself. Much like saying "the origins of my success" when talking about my business career. 2. The environment that led to the Wirecard scandal being possible I believe this is what the author actually sets out to do. In this the article didn't really look at the scandal itself, but rather the atmosphere -or place and time- from which Wirecard could have come happened in. This would be like saying "my origins" when describing that my family came from Wales.
  - deleted 5y ago
    [deleted]
andi999 5y ago
The article seems a bit weak on the origins of the wirecard scandal (and rambles more about the countries psychology)
- Mashimo 5y ago
  Because it's not an article about the wirecard scandal. It just uses it as one large example of scandals in Germany and why they happens on a social level. Here is an timeline overview of wirecard: https://www.ft.com/content/284fb1ad-ddc0-45df-a075-0709b36868db https://www.ft.com/content/284fb1ad-ddc0-45df-a075-0709b3686... ft probably has more in depth articles. If you want a more "entertaining" kind of video you can watch "ZDF Magazin Royale" https://www.youtube.com/watch?v=1g1jk_49r2U https://www.youtube.com/watch?v=1g1jk_49r2U (Similar to the style of Last Week Tonight") It has English subtitles.
jahller 5y ago
Why is it always Austrians?
- hackeraccount 5y ago
  There's a tradition that goes back to the 30's wherein they cause problems in Germany.
puchatek 5y ago
I had rather Germany stay in the global small league the way it is than be seduced by perceived anglo-saxon economic success and turn into some crappy copy of the US. The US truly scares me.
jacquesm 5y ago
A couple of observations: - this isn't the authoritative article on the origins of the wirecard scandal that the title would have you believe. It would be nice to read such an article but this isn't it. - BaFin, the German regulator has historically been the one to trust but failed to verify. This to a large extent because they didn't have the budget or the staff to do their work properly, traits it shares with many other regulators around the world. - Another problem is that regulators tend to have a two-way revolving door with the industry they are supposed to regulate. It is pretty rare to see a regulator that really takes such an industry to task. - Finally, and more worrisome: Europe and the United States have both stopped being hungry. Yes, SV gives the USA a headstart for now, but keep in mind that SV is a spin-off of the MIC, and that without that MIC SV would have not existed as a phenomenon. The 'silicon' in silicon valley doesn't point to servers or hardware but to a much more basic element: the transistor, which displaced the vacuum tube. Back in the vacuum tube days electronics factories were much more wide-spread across the globe than they are today, the tech was much simpler and as a consequence the entry level was a lot lower. Once a country could make glass making vacuum tubes was a relatively small step away. The distance between making glass and making modern chips is 50 years of investment in technology, a time horizon only very few regimes operate at, and usually those happen to be the plan-economies. So for everybody else the doors are now firmly closed. Europe is on the backfoot, within another 50 years or so I expect the United States to be on the backfoot too. Scandals like Wirecard are less rooted in the cycles of ascendancy of the tech world (though as a 'darling' Wirecard got away with more than they should have been able to) than they are in the simple fact that regulators are not operating independent of the industries they regulate. Boeing 737 Max anybody?
- FabHK 5y ago
  > - Another problem is that regulators tend to have a two-way revolving door with the industry they are supposed to regulate. It is pretty rare to see a regulator that really takes such an industry to task. Though the article specifically claims that this rarely happens in Germany, with the boundary between the political and commercial sphere being less porous than elsewhere.
  - 5y ago
EdwardDiego 5y ago
What got me about German business, as a Kiwi working with Germans, was a few things: 1) How cosy everyone in a given sphere is with each other 2) The nearly inevitable strip-club and coke in relationship building 3) The prevalence of kick-backs in contracts, although obviously euphemistically renamed. 4) How Germans accepted corruption as part of life 5) How they were proud that their corruption still got things built, unlike, say, the Italians Now I don't really have much experience outside of these two countries, so maybe this is the norm around the world. But shit. My DE parent company turned up on Muddy Water's[1] short list because of interesting share assignments, (paying above average for acquisitions) and unusual interactions with related entities. And I'm really not surprised. And I really struggled to not use the word cosy repeatedly in this, because it was applicable to much of it, and really sums up Germany's informal corruption as I've experienced it. Not that I claim NZ is any better, but here slight corruption doesn't feel like an accepted norm. [1]: https://www.muddywatersresearch.com/ https://www.muddywatersresearch.com/
- scanny 5y ago
  I think NZ is far better off than most other nations, we consistently rank 1st or 2nd as the least corrupt country on earth [0] (I am also a kiwi living in Germany :) ). Also anecdotally I cannot think of a single corruption scandal on par with anything here in DE or even across the Tasman. 0. https://www.transparency.de/cpi/ https://www.transparency.de/cpi/
- Glawen 5y ago
  I never experienced corruption in Germany, people have always been very honest. However I don't navigate in the business sphere. I did notice strange things which suggest corruption, like constantly rebuilding perfect roads, every time by the same companies but of course I got no proof.
MrEuribor 5y ago
I think the article touches on a broader problem with European approach to finance, innovation, and competition in the globalized economy (to be clear, I say that as a European). It is hard for anyone living here not to notice that the continent is slowly falling behind and becoming more provincial in many ways. This leads to some defensive and delusional attitudes, often presented on this forum ("we may underperform economically but that's okay because quality of life here is better and we don't have all the shootings and inequality" or "it is better to have stable low growth than excessive speculation-driven growth"). This mentality is especially striking when applied to the field of finance - which is associated with greedy ruthless US-style capitalism. There is a certain pride in the fact that financial markets in Europe are fragmented, over-regulated and underdeveloped. Nobody seems to recognize that despite all their flaws US markets are much more transparent and less corrupt. I have participated in discussions where people debated Gamestop saga, concluding that thankfully in Europe it would not be possible because we "protect retail investors" here and don't allow payment for order flow. The fact that European retail investors get a terrible deal, with inflated costs to access the market, lack of choice, and mediocre returns, did not seem to bother anybody. Almost everyone I know prefers to invest in US stocks, through US brokers with local subsidiaries. The precious few recent attractive European companies that I know of all got listed in New York. Wirecard case really is symptomatic. To run a global innovative business in Europe you cannot cut corners and bend the rules Uber-style; EU regulations "protect" us from that kind of enterpreneur. The only way is for the business to be an outright fraud.

Haga 5y ago

The origin is a stagnant culture desperate to emulate the success of the valley, but unable to copy the culture that created said success, opening doors wide for con men.

durnygbur 5y ago

The German anti-English sentiment is sometimes right. They're not afraid to point out omnipresent Anglosphere oligopolies - in payments (Visa, Mastercard), in social networks (Facebook, LinkedIn), in surveillance (Google, Facebook), in mobile (Google, Apple). While the rest of the Europe entirely submits to these oligopolies on a promise of receiving "investment". Funny though how Germans turn blind eye on their own oligopolies dominating and devastating European markets. Part of the problem is that German economy is ruled by industrial and media moguls. For them internet is whether "stupid websites", a medium serving copyrights violations, or legal compliance issue (see "Impressum" hysteria). Either way an issue rather than opportunity. With their geriatric population the strategy is basically - increase public media fee, 50mbit copper internet in every household, internet for broadcasting public media content while throttling any alternatives.

apples_oranges 5y ago
I have the feeling that separation of powers tends to be stronger in the US. But maybe it's false..
- michaelscott 5y ago
  I don't know if it's intentional separation of powers. The American culture is very individualistic, especially compared to the German. This just naturally means that American companies tend to "go it alone" in relation to the public sector for longer than they would in Germany. Certainly when American companies get to the right size they seem to become much closer to the political bodies that matter to them and their interests, as is the case likely everywhere
  - ChuckNorris89 5y ago
    >The American culture is very individualistic, especially compared to the German. I wouldn't rush to this conclusion. US billionaires usually run many charity funds whereas German billionaires rarely do anything like that. Also, German businesses owners don't seem to mind exploiting people's health and the environment (VW emissions scandal) or foreign workers [1] if it makes them money, so I think the same issues that plague capitalism in the US (greed) affect Germany too. Otherwise, the wealth gap between rich and poor wouldn't be rising so steeply in Germany [2][3] if they wouldn't be so individualistic. [1]https://m.dw.com/en/germany-meat-industry-conditions/a-54033187 https://m.dw.com/en/germany-meat-industry-conditions/a-54033... [2]https://www.iamexpat.de/expat-info/german-expat-news/inheritance-and-coronavirus-are-increasing-wealth-inequality-germany https://www.iamexpat.de/expat-info/german-expat-news/inherit... [3]https://m.dw.com/en/study-shows-growing-wealth-inequality-in-germany/av-54412300 https://m.dw.com/en/study-shows-growing-wealth-inequality-in...
    - fh973 5y ago
      You can generalize that: German government doesn't mind exploiting people's health and the environment, and prioritizes industry interests. Two current examples: the ongoing ignorance about ground water pollution [1], and the Diesel air pollution affair, which is far from being over [2]. [1] https://www.dw.com/en/eu-sues-germany-over-water-tainted-by-nitrate-fertilizer/a-19225653 https://www.dw.com/en/eu-sues-germany-over-water-tainted-by-... [2] https://www.rhein-zeitung.de/deutschland-und-welt/wirtschaft_artikel,-umwelthilfe-beklagt-hohe-abgase-bei-dieselpkw-_arid,2246531.html https://www.rhein-zeitung.de/deutschland-und-welt/wirtschaft... (no English source)
    - luckylion 5y ago
      > I think the same issues that plague capitalism in the US (greed) affect Germany too. Definitely. It's a cultural thing, Germany (along with most Western countries) seems to follow the US in that regard. The individualism <=> collectivism scale is well studied, and there's a significant gap between the US and Germany. http://clearlycultural.com/geert-hofstede-cultural-dimensions/individualism/ http://clearlycultural.com/geert-hofstede-cultural-dimension...
luckylion 5y ago
> Funny though how Germans turn blind eye on their own oligopolies dominating and devastating European markets. Everybody wants sellers to compete when they're buying, nobody wants to compete when they're selling. > For them internet is whether "stupid websites", a medium serving copyrights violations, or legal compliance issue (see "Impressum" hysteria). The large corporations and media companies had issues with the laws around imprints? That wasn't my perception at all. Rather, it was average people who wrote blogs etc who didn't want to put their real name, home address and tax IDs onto their sites for various reasons, but the law was so vague that nobody was sure their site wasn't "similar to the press" or "with commercial interest". Larger companies didn't care at all -- they were generally compliant way before that law was introduced.
- durnygbur 5y ago
  > Larger companies didn't care at all -- they were generally compliant way before that law was introduced. If you write anything on the internet you're publishing content, ie. media might start consider you a competition, certainly after achieving certain visibility. Why not create an easy way to shot someone down or to suck someone into an expensive time consuming legal swamp?
  - luckylion 5y ago
    Oh, I misunderstood your comment, I believe. I took it to mean that the companies got into a craze about new requirements, not that they were welcoming the new requirements as it gave them some/more control over online publishing (which is how I understand your comment now, please correct me if I'm wrong). I generally agree in that case, they were probably happy for that moat.

apples_oranges 5y ago

Germany has their share of scandals.. Volkswagen, Deutsche Bank, Sparkasse, other banks.. Wirecard.. but politicians of course had no idea.. afterwards they are all shocked and surprised.. sigh. Especially Wirecard.. is such a failure on so many levels. Lead me to the conclusion: 90% of people half ass everything. It's like "The Wire" all the way. I bet you even Google, Apple and Facebook half ass stuff.. it's just a facade of elitism at those places.. Places like EY. Being a consultant, I've worked at several such places.. it's 100% true. (but to be fair they also had their share of brillant people) So many people are pretending their way throughout their whole careers. While basically being incompetent.. or not giving a damn.. sigh.

signal11 5y ago
I had heard about the Wirecard scandal, but didn’t know the details. Having read the article now, I do wonder how Ernst & Young signed off on Wirecard’s accounts.
- wereHamster 5y ago
  Money has been exchanged for services rendered.
TGImemegen 5y ago
Of course a lot of people half-ass stuff at FAANGs, they're only human (plus there's been enough scandals coming out of those places that it's no secret any more).
deleted 5y ago
[deleted]
Glawen 5y ago
don't forget the big infrastructure project like BER which entertained me a lot. A story I like particularly is the Phantom of Heilbronn (related to another big scandal: the NSU) which I think explain what is happening: Germans have a great confidence in them and other germans. They are very suspicious when something comes from outside Germany / Austria (like France, Italy, or UK), but if it is german it must be good and seriously done! Truth is, Germany also has a share of slackers and fraudsters doing half assed stuff, but they admit their failures and sins only when it has become overwhelming, leading to crazy scandals. I still remember my colleagues who were proud of VW when the dieselgate came out. They were completely shocked. VW did this! They were expecting this from the sleazy french and italian, but not from their own beloved german company.

Mashimo 5y ago

> When scandal happens, the country seems less interested in figuring out who exactly did what than in letting the old reflexes of collective guilt kick in. Ha. True. What a great read. Thanks for sharing. > A scandal like Wirecard is powered by the dream that you could have an Uber without slashing workers’ protection—that one could hold on to what remains of the German social market economy while at the same time going all-in on laissez-faire capitalism. ;_; let us dream and stop holding up a mirror in front of us.

pintxo 5y ago

Another aspect might be the often seen focus on the law, ignoring the policing aspect: "It's forbidden to do this by law, so we don't need to do X".

allendoerfer 5y ago

There are federal elections in September in Germany. CDU just fell behind the Green Party in recent polls and SPD (whose Olaf Scholz ultimatively was in charge of BaFin) is a shadow of it's former self anyway. I do not think the everything will turn for the better, but I am hopeful that some actions will be taken. The political style of Merkel - and Germany as a whole for that matter - of a steady hand and waiting for consensus to form to go with, will hopefully be ammended by some visionary ideas. I feel the German inferiority complex described in the article. I think it is partly built on a misunderstanding: Silicon Valley was not funded by smart engineers thinking in their garages. It was funded by massive military grants. The garages came later. Last time Germany gave out massive military grants it was sadly very able to compete technologically. Everyone knows, who worked on the rockets that ultimatively won the space race. German universities are indeed world-class. It's not like uneducated people can export this much. The university rankings do not take into account that research in Germany happens at Fraunhofer or Max Planck, which are door to door to their respective university and have shared staff. If all their papers would be taken into account, the rankings would change dramatically. Germany is capable and cold start investing massively. I think the article exactly gets it: We are just too comfortable. Acting like a big Switzerland might not be glorious but in the end I take a socially relatively cohesive country, where an illness or going to university will not bankrupt you, where your kids can travel alone in public transportation, where police shootings per year are single digits, where the air is very breathable and the tap water is drinkable over world leadership any time. We can always pump some billions into football or another sport once in a while and watch the nation win the world cup, if we really need to dominate something for no good reason, which is an obvious connection to national pride, the article missed out on.

redis_mlc 5y ago
> Silicon Valley was not funded by smart engineers thinking in their garages. It was funded by massive military grants. The garages came later. Well, not exactly: - Stanford U. was the US West Coast US military communications lab - but Shockley (1956) and HP Labs (1966) started in a storefront/lot and garage respectively. The military was just one customer, and both recruited researchers from Bell Labs. > I take a socially relatively cohesive country ... over world leadership any time. US hegemony allows the rest of the countries in its sphere to live in peace, while only paying half or less of their fair share in defense spending. You're welcome. Another post that supports my suggestion to ban European IP addresses from HN - just pointless drivel from the Old World. You know exactly what Russia what do to your German family and friends without "US dominance." https://en.wikipedia.org/wiki/Shockley_Semiconductor_Laboratory https://en.wikipedia.org/wiki/Shockley_Semiconductor_Laborat... https://en.wikipedia.org/wiki/HP_Labs https://en.wikipedia.org/wiki/HP_Labs

idownvoted 5y ago

Actually pretty accurate. > Karl Theodor zu Guttenberg There are many more such impostors, that fake their international standing to cater to the local audience: Our Covid-Expert Lauterbach, presenting himself as an Medical Professor from Harvard, while all he achieved there was publishing anopinion piece, which somehow got him tenured here, although said piece was kept secret for over a decade. > The spheres [of politics and business] are actually surprisingly separate Another thing us Germans routinely pride ourselves while simoutlaniously lambasting the US with: Our politicians just can't buy their campaigns off inherited/donated wealth. The downside to this: German politicians are usually unemployable individuals, because you cannot rise inside your party's ranks, if you have a proper job. They sport degrees in political science or law, with the latter one only used for law making not helping actual clients. Thus our leadership is prone for lobbying.

stewbrew 5y ago

Well, I don't think this article does a good job at explaining the scandal. It seems to me the author had a thesis and is mostly occupied with explaining that. What makes wirecard interesting are all these connections with politicians, oligarchs, secret services etc. Some day in the not so distant future, somebody will make a tv series out of this.

FabHK 5y ago
I agree that there are more salacious details that the author didn't really touch on (particularly concerning Marsalek), but I think the author's embedding of the scandal in the political and economic fabric of post-war Germany was quite well done. (Oh, and I do hope there'll be a TV series!)
ajcp 5y ago
> I don't think this article does a good job at explaining the scandal. I think that's because of their use of "origin". Both the title here and that of the article ("The Weird, Extremely German Origins of the Wirecard Scandal") can be taken two ways: 1. How the Wirecard scandal transpired I think this is what you took it to mean. Where "origin" means the beginnings of the scandal itself. Much like saying "the origins of my success" when talking about my business career. 2. The environment that led to the Wirecard scandal being possible I believe this is what the author actually sets out to do. In this the article didn't really look at the scandal itself, but rather the atmosphere -or place and time- from which Wirecard could have come happened in. This would be like saying "my origins" when describing that my family came from Wales.
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andi999 5y ago

The article seems a bit weak on the origins of the wirecard scandal (and rambles more about the countries psychology)

Mashimo 5y ago
Because it's not an article about the wirecard scandal. It just uses it as one large example of scandals in Germany and why they happens on a social level. Here is an timeline overview of wirecard: https://www.ft.com/content/284fb1ad-ddc0-45df-a075-0709b36868db https://www.ft.com/content/284fb1ad-ddc0-45df-a075-0709b3686... ft probably has more in depth articles. If you want a more "entertaining" kind of video you can watch "ZDF Magazin Royale" https://www.youtube.com/watch?v=1g1jk_49r2U https://www.youtube.com/watch?v=1g1jk_49r2U (Similar to the style of Last Week Tonight") It has English subtitles.

jahller 5y ago

Why is it always Austrians?

hackeraccount 5y ago
There's a tradition that goes back to the 30's wherein they cause problems in Germany.

puchatek 5y ago

I had rather Germany stay in the global small league the way it is than be seduced by perceived anglo-saxon economic success and turn into some crappy copy of the US. The US truly scares me.

jacquesm 5y ago

A couple of observations: - this isn't the authoritative article on the origins of the wirecard scandal that the title would have you believe. It would be nice to read such an article but this isn't it. - BaFin, the German regulator has historically been the one to trust but failed to verify. This to a large extent because they didn't have the budget or the staff to do their work properly, traits it shares with many other regulators around the world. - Another problem is that regulators tend to have a two-way revolving door with the industry they are supposed to regulate. It is pretty rare to see a regulator that really takes such an industry to task. - Finally, and more worrisome: Europe and the United States have both stopped being hungry. Yes, SV gives the USA a headstart for now, but keep in mind that SV is a spin-off of the MIC, and that without that MIC SV would have not existed as a phenomenon. The 'silicon' in silicon valley doesn't point to servers or hardware but to a much more basic element: the transistor, which displaced the vacuum tube. Back in the vacuum tube days electronics factories were much more wide-spread across the globe than they are today, the tech was much simpler and as a consequence the entry level was a lot lower. Once a country could make glass making vacuum tubes was a relatively small step away. The distance between making glass and making modern chips is 50 years of investment in technology, a time horizon only very few regimes operate at, and usually those happen to be the plan-economies. So for everybody else the doors are now firmly closed. Europe is on the backfoot, within another 50 years or so I expect the United States to be on the backfoot too. Scandals like Wirecard are less rooted in the cycles of ascendancy of the tech world (though as a 'darling' Wirecard got away with more than they should have been able to) than they are in the simple fact that regulators are not operating independent of the industries they regulate. Boeing 737 Max anybody?

FabHK 5y ago
> - Another problem is that regulators tend to have a two-way revolving door with the industry they are supposed to regulate. It is pretty rare to see a regulator that really takes such an industry to task. Though the article specifically claims that this rarely happens in Germany, with the boundary between the political and commercial sphere being less porous than elsewhere.
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EdwardDiego 5y ago

What got me about German business, as a Kiwi working with Germans, was a few things: 1) How cosy everyone in a given sphere is with each other 2) The nearly inevitable strip-club and coke in relationship building 3) The prevalence of kick-backs in contracts, although obviously euphemistically renamed. 4) How Germans accepted corruption as part of life 5) How they were proud that their corruption still got things built, unlike, say, the Italians Now I don't really have much experience outside of these two countries, so maybe this is the norm around the world. But shit. My DE parent company turned up on Muddy Water's[1] short list because of interesting share assignments, (paying above average for acquisitions) and unusual interactions with related entities. And I'm really not surprised. And I really struggled to not use the word cosy repeatedly in this, because it was applicable to much of it, and really sums up Germany's informal corruption as I've experienced it. Not that I claim NZ is any better, but here slight corruption doesn't feel like an accepted norm. [1]: https://www.muddywatersresearch.com/ https://www.muddywatersresearch.com/

scanny 5y ago
I think NZ is far better off than most other nations, we consistently rank 1st or 2nd as the least corrupt country on earth [0] (I am also a kiwi living in Germany :) ). Also anecdotally I cannot think of a single corruption scandal on par with anything here in DE or even across the Tasman. 0. https://www.transparency.de/cpi/ https://www.transparency.de/cpi/
Glawen 5y ago
I never experienced corruption in Germany, people have always been very honest. However I don't navigate in the business sphere. I did notice strange things which suggest corruption, like constantly rebuilding perfect roads, every time by the same companies but of course I got no proof.

MrEuribor 5y ago

I think the article touches on a broader problem with European approach to finance, innovation, and competition in the globalized economy (to be clear, I say that as a European). It is hard for anyone living here not to notice that the continent is slowly falling behind and becoming more provincial in many ways. This leads to some defensive and delusional attitudes, often presented on this forum ("we may underperform economically but that's okay because quality of life here is better and we don't have all the shootings and inequality" or "it is better to have stable low growth than excessive speculation-driven growth"). This mentality is especially striking when applied to the field of finance - which is associated with greedy ruthless US-style capitalism. There is a certain pride in the fact that financial markets in Europe are fragmented, over-regulated and underdeveloped. Nobody seems to recognize that despite all their flaws US markets are much more transparent and less corrupt. I have participated in discussions where people debated Gamestop saga, concluding that thankfully in Europe it would not be possible because we "protect retail investors" here and don't allow payment for order flow. The fact that European retail investors get a terrible deal, with inflated costs to access the market, lack of choice, and mediocre returns, did not seem to bother anybody. Almost everyone I know prefers to invest in US stocks, through US brokers with local subsidiaries. The precious few recent attractive European companies that I know of all got listed in New York. Wirecard case really is symptomatic. To run a global innovative business in Europe you cannot cut corners and bend the rules Uber-style; EU regulations "protect" us from that kind of enterpreneur. The only way is for the business to be an outright fraud.