Greece-Siemens $411 Million Settlement Raises Questions

German tech giant Siemens AG has reached a 330 million euro ($411 million) settlement with Greek authorities for alleged bribery cases dating back to 1997, reported the Daily Telegraph on Monday, with a bulk of the sum expected to go into government infrastructure projects and other investments in the country.

German tech giant Siemens AG has reached a 330 million euro ($411 million) settlement with Greek authorities for alleged bribery cases dating back to 1997, reported the Daily Telegraph on Monday, with a bulk of the sum expected to go into government infrastructure projects and other investments in the country.

The agreement was signed by Finance Minister Yannis Stournaras last week; and will see Siemens write-off nearly 80 million euros owed to it by the Greek state, besides guaranteeing 250 million of investment into the country.

[quote]“By signing the agreement, the Greek government achieves significant financial benefit and the benefit to the real economy through positive actions and a range of benefits,” wrote the Greek finance ministry in a statement on its website.[/quote]

But, some opposition politicians in Athens were outraged by the size of the settlement, especially after a Greek parliamentary committee had estimated last year that nearly 2 billion euros in damages was caused by the corruption scandal.

According to the Daily Telegraph, Greek prosecutors had spent years investigating allegations that Siemens bribed officials to win contracts from Hellenic Telecom between 1997 and 2020, as well as to provide a new security system for the Athens Olympics in 2004.

Dimitris Papadimoulis, a spokesman for the leftist Syriza party, described the agreement as an “extrajudicial compromise” that favoured Siemens and not Greece.

Siemens is practically walking away “scot free”, Papadimoulis said, calling the agreement “yet another scandal in a larger scandal.”

But the finance ministry has also pointed out the non-monetary benefits that the deal provides. Besides paying over 90 million euros in the next five years to fund Greece government infrastructure projects, Siemens has also pledged to invest 100 million euros in Greece during 2012 “to ensure the continued presence and activity of the company, which currently employs more than 600 employees.”

In addition, the German company has also agreed to “build a new plant in Greece with a budget of over 60 million euros, which will lead to the employment of over 700 people.”

Still, Costas Markopoulos, group secretary of the Independent Greeks party, said that the agreement was a “gift” from prime minister Antonis Samaras to German chancellor Angela Merkel, after the two had also met in Berlin last week to discuss Greece’s bailout terms.

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[quote]“Mr Samaras was elected with the banner of a renegotiation (of the Memorandum), which he immediately forgot,” said Markopoulous. “He went to Ms Merkel with a ‘gift’ being the settlement of Siemens’ debts, and forgot the extension.”[/quote]