Europe's biggest brothel, Pascha in Cologne.

Europe's biggest brothel - the 12-storey, neon-wrapped Pascha in Cologne. Photo: Albrecht Fuchs/Daily Telegraph,

Paradise is a brothel in Stuttgart. It is one of Germany's ''mega-brothels'' and, like a lot of those establishments, has a Moroccan theme. Picture a sultan's palace crossed with a budget hotel, then wedge it between anonymous office blocks on an industrial park and you're there: Paradise.

This isn't my first time in a brothel. In Bangkok, aged 19, I checked into a place called Mango Inn with two friends. Within hours we'd seen enough to get the joke. But that scuzzy little concern, with its scarlet-haired manager and beery tourist crowd, was small fry next to this.

People think Amsterdam is the prostitution capital of Europe but Germany has more prostitutes per capita than any other country on the Continent, more even than Thailand. 

Paradise is a chain, like Pizza Hut, with five branches and more on the way. So business is booming, I remark to Michael Beretin, a partner.

German prostitute.

One of Germany's 400,000 prostitutes. Photo: Albrecht Fuchs/Daily Telegraph,

''Yes!'' he says, his £100,000 ($186,000) Audemars Piguet watch glinting under the lanterns. The latest addition is the 15,000 square foot Paradise Saarbruecken. It is modelled on the Stuttgart flagship, which Beretin invites me to visit on a day blighted by icy rain.

Each of its six floors is picked out with a thick stripe of burgundy cladding, making it look like a slice of cake. Inside it's baking. ''Take your clothes off!'' cries Beretin, tugging at my coat.

It's 6pm and about 30 men are padding about in towelling robes and plastic slippers. The women sit in the men's laps at the bar. One cuddles up to a pot-bellied man on a day-bed. Several cluster together, looking bored in their black glitter basques and hot-pink fishnets.

People think Amsterdam is the prostitution capital of Europe but Germany has more prostitutes per capita than any other country on the Continent, more even than Thailand: 400,000 at the last count, serving 1.2 million men every day.

Those figures were released soon after Germany made buying sex, selling sex, pimping and brothel-keeping legal in 2002. Two years later prostitution in Germany was thought to be worth €6 billion ($9.18 billion).It's now estimated at €15 billion ($22.96 billion).

''That law was for the government to make a lot of money,'' Beretin says, strolling past a woman in a lime-green shrug (and nothing else). Another woman, nude but for hold-up stockings, is filling out paperwork at the reception desk. Quite a few people agree with Beretin - and not all of them are brothel owners grumbling about their tax bills.

The idea of the law was to recognise prostitution as a job, like any other. Sex workers could enter into employment contracts and take out health insurance and pension plans. Exploiting prostitutes was still criminal but everything else was above board. It didn't work.

''Nobody employs prostitutes in Germany,'' says Beretin.

And only 44 prostitutes have registered for benefits. What did happen was the opening of Europe's biggest brothel - the 12-storey, neon-wrapped Pascha in Cologne. Not to mention a rash of FKK, or ''naked'', clubs where men can drift between sauna, bar and bedrooms. Bargain-hunters might try the ''flat-rate'' brothels, where a €50 to €100 entry fee buys unlimited sex with as many women as they want. Or cruise the drive-through ''sex boxes'' in the street-walking zones. (They look like stables and are known as verrichtungsboxen, which translates loosely as ''getting-things-done boxes''.)

The debate about prostitution laws has been reignited by an EU directive that obliges member states to ''reduce demand'' for human trafficking. Given that almost 70 per cent of trafficking in Europe is into forced prostitution, many argue that the best way to do that is to reduce demand for prostitution.

Sex-trafficking statistics are frustratingly incomplete, but a recent report put the number of victims in Europe at 270,000, and Germany and the Netherlands consistently rank among the five worst black spots. It is one reason the Netherlands has gone into reverse with legalisation. The country legalised prostitution two years before Germany - a move its deputy prime minister has called ''a national mistake''.

''For a trafficker it's much easier to go to a country where it's legal to have brothels and where it's legal to manage prostitutes,'' says Andrea Matolcsi, the program officer for sexual violence and trafficking at the human-rights organisation Equality Now.

Legalisation has certainly made rich men of Michael Beretin and his business partner, Juergen Rudloff.

More than 55,000 men visit Paradise Stuttgart every year. Everyone - punter and prostitute - pays a €79 entry fee. That includes food (there is a buffet right by the jacuzzi), but the sex is negotiated between the man and woman, for which the going rate is about €50 for half an hour - all of which the woman keeps.

''Prices are going down,'' says Suzi, a 29-year-old Romanian who has been working at Pascha for two years. ''Every day less.''

Paradise is near the top of the market. Pascha is a couple of rungs lower, and there are many more rungs below that. At the ''sex boxes'' in Geestemuender Strasse in Cologne it's possible to buy sex for as little as €10. ''One woman here will even do it for a Big Mac,'' claimed a prostitute called Alia last year.

Germany has been flooded with foreign sex workers, mostly from Eastern Europe. Their sheer number, and willingness to accept lower rates, has driven down prices to such an extent that one punter calls the country ''Aldi for prostitutes''.

''Prostitution has reached intolerable levels here,'' says Saarbruecken's mayor, Charlotte Britz. As with many German cities, Saarbruecken's sex industry really exploded in 2008 when Romania and Bulgaria were acceded to the EU. There are at least 100 brothels in the city.

I spot five on the short walk from the train station to her office.

Britz, 55, sips tea as she recounts stories of prostitutes approaching men in supermarket car parks and even, once, at a funeral. Residents complain about condoms littering the bus stops children use to go to school. ''I am not OK with that,'' she says.

But the law leaves Britz with her hands tied. ''It's easier to open a brothel in Germany than a chip shop,'' she says. That's true: while food premises need licences, there are no restrictions on brothels. That's because all they do, technically, is rent rooms. The prostitutes are their customers just as much as the punters are. Sometimes, more so.

''Pascha's main income is the rent we get from the girls,'' says Hermann Mueller, the club's chain-smoking 39-year-old night manager.

At Pascha women pay €175 for 24 hours' use of a room. They sit on stools outside their open doors in long, dark corridors that smell of cigarettes and air-freshener. Some of them look anxious. They'll need to sleep with at least four men to break even.

The punters - 1000 a day - pay €5 to an enormous security guard. They might visit a glory hole on the first floor or the transsexuals on the seventh. As at Paradise, there is a hairdresser on site. There's a self-service restaurant, too, and a boutique selling glittery platform shoes and condoms in packs of 100.

The prostitutes are not the brothel's employees. ''In reality the brothel owner and the prostitute don't want to have an employment contract,'' Guntram Knop, an expert in prostitution law, tells me. ''They want to save the social-security contribution.''

Both parties certainly cut their costs by eliminating health insurance and pension contributions. A lot of the women at Pascha come to Germany for only eight weeks, so they have little incentive to give a chunk of their earnings to social security. For self-employed prostitutes who do want insurance, premiums are high - about €500 a month - because of the risks.

Most are in a similar situation to Suzi: her family has no idea what she does and she would rather there was no record of her work. As Kristina Marlen, a spokeswoman for Germany's Trade Association for Erotic and Sexual Services, puts it, ''People don't want on their CV, 'I was a whore from 2007 to 2009'.''

The brothel owners' rationale isn't purely financial. When a journalist asked if the women at his clubs were working voluntarily, Paradise's Juergen Rudloff replied, ''That's not my business.'' Strictly speaking, he's right. As long as they're just renting rooms, brothels have no accountability towards the prostitutes.

If you saw Suzi outside her door she'd be wearing ''a simple bra and high heels. Very high.'' Now she's in a pink adidas T-shirt and black tracksuit bottoms. Suzi spent years cleaning hotels in Italy, Spain and Greece before becoming a prostitute. ''A friend who did it said it's fast money,'' she says. ''I cannot say easy money because it's not. You find here all kinds of persons, difficult persons. You know, you must be like a gum - malleable. Become whatever they need.''

One Pascha regular is Robert. He visits two or three times a week with friends or colleagues from the pizzeria where he works. There are, he says ''a lot of idiots'' walking around who are ''drunk and disrespectful'' to the women. ''Like, 'Hey, bitch, I am too nice for you'.''

Robert is 23. He's an average-looking guy with a gentle manner. Couldn't he just chat up a woman in a bar? ''It's easier here. You spend your money, you know what you get. You don't have to talk about anybody or anything.''

He's noticed ''a few girls'' who seem unhappy. What would he do if he thought one was being forced? ''I just wouldn't go with her.''

Lea Ackermann, who set up the German charity Solwodi to support victims of sex trafficking, tells me about a 17-year-old Russian - let's call her Klara - whose family was desperate for money. Seeing an advert offering temporary work as a prostitute in Germany, Klara thought, ''It will be awful but for three months I can bear it.''

She was raped by several men the night she arrived. They took her passport. There was another girl who wouldn't do something a customer wanted and they broke a bottle, a glass bottle, and raped her with that.'' Klara was trapped there for four years.

Herbert Krauleidis is showing me his website, gesext.de, on a huge screen in his boardroom in Stuttgart. Gesext is basically eBay for sex: people (mostly women) post pictures of themselves and a description of what they're open to and other people (mostly men) bid for them. Krauleidis, 59, is in talks with investors about expanding the site to ''countries with laws that allow it, like Austria, Spain, Switzerland and the UK''.

Gesext features a mind-boggling array of categories from ''slaves'' to ''gang bangs''. One of the women on his site is Jacky, 36, a single mother from Stuttgart who has seen about 100 men over two years, making €100 to €150 each time. She's had a 76-year-old client die of a heart attack during an appointment. It was, as she puts it, ''horrible for his wife''.

Whoever places the highest bid is the man Jacky has to meet. Bidders register with their name and address and that, along with a ratings system, is the sum total of gesext's safeguards. Krauleidis is launching a new mobile app next month called Touch & Sex. His press officer - yes, he has a press officer - describes it to me: ''So you check into a hotel, you look at your phone and choose a woman.''

''Like a pizza,'' says Krauleidis, absent-mindedly scrolling through his emails.

Back in 2002 the liberal Left imagined a sex industry in which responsible managers would push out exploitative pimps. Empowered prostitutes would work in safety and the money from this hitherto black market would go into pension pots and the German treasury. Well, they got their taxes.

Paradise's Rudloff appeared in a documentary about prostitution in Germany last summer. In one scene he's sitting in his spacious kitchen surrounded by his four shiny-haired, privately educated children. Would he be happy for either of his two daughters to work at Paradise, the interviewer asks.

Rudloff turns puce. ''Unthinkable, unthinkable,'' he says. ''I don't mean to offend the prostitutes, but I try to raise my children so that they have professional opportunities. Most prostitutes don't have those options. That's why they're doing that job.''

He pauses and looks away. ''Unimaginable,'' he repeats. ''I don't even want to think about it.''

Telegraph, London