As the war in Ukraine unfolds with unforeseeable outcomes, Germany has surprised the world by doing a political U-turn, undoing decades of established policy dogma with the announcement to be investing €100 billion into its military, along with sending weapons to Ukraine. The about-face is a wake-up call for Berlin that Europe’s geopolitical conditions require strength and deterrence in the face of unprecedented Russian aggression. However, for Germany there’s another, rather embarrassing side to the conflict: the enduring legacy of former chancellor Gerhard Schröder and the impact his cozy ties to Russia may or may not play a role in Berlin’s long-delayed and tortured response to the Ukrainian crisis.
Schröder embodies the revolving door between politics and business like perhaps no other European leader. After being voted out in 2005, Schröder ditched Germany for a lucrative chairman position at one of Russia’s biggest companies, Gazprom – a major shareholder of Nord Stream 2 – on Putin’s invitation. The move was no coincidence: not only had Schröder exposed himself to ridicule when he referred to Putin as a “flawless democrat” in 2004, but, notably, also signed the controversial pipeline agreement that is haunting European politics today a mere weeks before leaving office.
The spectre haunting Europe
Harshly condemned as “cronyism” and “corruption”, the unethical move has since then had nefarious effects. In 2017, the erstwhile chancellor joined Rosneft as an “independent director” in another highly criticized promotion. Most recently, Schröder duly amplified the Kremlin’s anti-Ukrainian propaganda when he accused Kyiv of “sabre-rattling” and only half-heartedly condemned the invasion as it unfolded, in what is another of many low-points in Schröder’s post-political career of shilling for Putin’s autocratic regime.
The tale highlights an important aspect, namely that high-level corruption and cronyism are as prevalent in countries where the political class is largely regarded as full of integrity as it is in oft-derided Eastern European countries. Germany especially has distinguished itself in that regard lately, given that Foreign Minister Annalena Baerbock tapped Greenpeace’s top lobbyist as her state secretary, further blurring the line between governmental functions, private NGO activism and opaque networks.
At the end of the day, the basic anatomy of corrupt behaviour is universal – political and business connections, and concordant conflicts of interest, work to elevate a few select people – it repeats all over Europe in the same pattern. It is the same pattern that has bred political opportunists like Schröder, Jennifer Morgan or Austria’s Karl-Heinz Grasser in politics, as well as the classic oligarch prevalent across the Eastern bloc.
Tight media control
A look at the EU’s most corrupt member, Bulgaria, reveals the many shapes corruption and influence-peddling can take. In the years since the end of socialist rule in the country, a particular type of oligarch has risen to the fore, centred around influential media conglomerates. Interests interwoven with those of the political establishment have ensured that these oligarchs were able to acquire public goods with impunity, and one of the most successful ones at doing so, Ivo Prokopiev, has since become the personification of what it means to be at the nexus between political power and media control.
In 1993, Prokopiev launched Capital, a financial weekly, and has since expanded his media empire to include dozens of publications. His support for the far-right leader Ivan Kostov in 1997 led to Prokopiev’s inclusion among the select few who had access to the country’s privatisation drive, so that in 1999, he was able to acquire Kaolin mining company for a little over $2 million – after the government rejected a Belgian firm’s bid worth ten times as much. A perfunctory investigation into the deal was undertaken by prosecutors, but the case quickly fizzled out.
Prokopiev has more recently come under fire for how his newspaper empire is undertaking “undercover PR” and “undercover advertising”, with several Bulgarian media insiders confirming that “there are undercover paid messages” in the workplace. The result is a media landscape dominated by one-sided political agendas, only exacerbated by the accelerating de-Westernization of the early 2000s, the leading causes for declining media freedom in the country.
Bulgaria’s quasi-feudalistic media structure is only surpassed by the real-life modern iteration of feudalism in Viktor Orban’s Hungary. Over years, the country’s PM has successfully established a system designed to channel most of Hungary’s billions of CAP subsidies to political cronies, as well as members of his own family. At the core of the system is insider trading with farmland, which is being doled out to Orban’s supporters and friends for below market prices, making them powerful landowners who then lease the farmland out to farmers and firms at a premium.
Because CAP subsidies are determined by the amount of land held rather than the quality of produce, it goes without saying that this comes at the expense of the average farmer. All told, it’s estimated that 80% of all the subsidy money that Hungary receives goes to the largest 20% of the farmers – political kingpins and landowners among them. Brussels has been well-aware of this practice and has moved to correct it through expanded use of ARACHNE, a data mining tool employed by the European Commission for the tracing of allocated EU Funds. So far, however, the issue hasn’t moved and seems unlikely to make progress soon.
All of the described examples illustrate that corruption occurs in every country across the EU. In Germany’s case, the behaviour of top-level politicians is especially egregious for the adverse effects it has on the reputation of German institutions as well as the country’s, and by extension the EU’s, foreign policy. The results could be disastrous, seeing how hard-pressed Scholz and Baerbock have previously been to define a hard line in the face of outright war in Ukraine.
Even if the damage is less evident or quantifiable than is the case with Prokopiev or Orban, it is important to remember that even if the examples are somewhat different in quality, they’re nonetheless equally harmful to their respective countries.
Image: Tim Reckmann/Flickr