Merkel, Mercedes and Volkswagen to abolish European democracy

That the German automotive industry is one of the strongest in the world is not news. Most Europeans are rather content in the idea that Europe is well represented in the fierce global automotive arena, not because we are or will ever be shareholders of Mercedes or Volkswagen, but rather because when we see an Audi R8 in a Hollywood blockbuster we think Europe.

That Mercedes and Volkswagen are extremely wealthy German corporations, which support the European economy significantly and provide jobs to many Europeans, is one thing. That these companies can evade EU norms, or even worse, can be used by top German leaders as political leverage to exercise unprecedented blackmails, which harm the environment and the European consumer, is another thing though.

Merkel hits the break of Democracy

As we all know lobbying in Brussels is not played with sprouts but rather with millions of euros. I guess it is expected that those German giants basically run the European Automobile Manufacturer’s Association (ACEA). What is not expected nor forgiven by any European, though, is that German car makers are allowed to evade EU Directives on CO2 emission because of their good lobbying. Not to mention the scene, which could have been easily taken from a horror movie, when the mere German Chancellor explicitly and shamelessly interfered with the democratic processes of the EU, in order to stall an already taken decision that could potentially harm her exquisite car voters?

In the last couple of weeks we are living an unseen “automotive thriller” in Europe where companies and prime ministers come together to abolish democracy and bully EU leaders and citizens, threatening that that they would take to the streets Audis with three wheels if we don’t do as they say. We thought it was high time that the Sting comes out to pull some ears and inform the European citizen how global warming was not sufficiently combated in Europe just because Daimler did not want to lose 0.00001% of its profit share.

The Agreement and the Phone

Let’s take one thing at a time. One of the top priorities of Europe’s 2020 Strategy is to lower significantly the CO2 footprint of the European economy. In this direction decisive steps have been taken to reduce the CO2 emissions of cars in the European roads. One of those crucial steps was expected to be taken during the EU Summit of 27-28 June but unfortunately something went wrong. On Monday the 24 of that week the European Commission, the European Council and the European Parliament had struck a deal on setting the target of 95g CO2/km car fleet average limit for 2020. Everyone was expecting for this issue to have a high priority in the agenda of the Summit and finally the agreement to be sealed by the 27 leaders. Until the phone rang…

According to confirmed diplomatic sources, the night before the EU Summit the Chancellor of Germany picked up the phone and called the Prime Minister of Ireland, Mr Enda Kenny, who was running his last days at the Presidency of the EU Council. The reason was not to congratulate the Taoiseach for his good work at the Presidency but to explicitly order him to drop the agreement on the CO2 emissions from the agenda of the EU Summit, because it hurt the interests of the German car giants. If this sounds like a scene from Francis Ford Coppola’s masterpiece, the Godfather, wait until you read what the Prime Minister of Europe’s biggest economy stated during the Summit on the issue: “At a time when we’re spending days sitting here talking about employment, we must pay attention not to weaken our own industrial base despite the need to make progress on environmental protection”. So basically Merkel said to everybody to back off or else her German giants will start firing people. If this is not a blackmail of the worst kind, then words have lost their meaning in European politics.

Mind you that this was said during the Summit where unemployment was top priority in the agenda. It was exactly when our EU leaders took the “groundbreaking” decision to put 6 billion euros in the European SMEs to hire European young people under 25 to do cleaning jobs for free. Hence, it was when the EU leaders showed their superficial sensitivity to youth’s unemployment that the German Chancellor decided to threaten the EU that she will close German car factories if the 95g CO2/km plan proceeds.

Everybody against Merkel

As expected, all thinking people came to criticize the “unwise” political move of Mrs Merkel, that finally gave away her “deep” belief in democracy. Her compatriot MEP Matthias Groote characterized the stance of his “Climate” Chancellor as “helpless” and “brazen”. The dance of severe criticism continued with Mrs Monique Goyens, Director General of The European Consumer’s Organisation (BEUC): “It’s consumers who will pay the price for this last-minute scuppering of the deal on car CO2 emissions. Consumers have been let down by the Council bowing to tremendous pressure from Germany. Shelving this today risks a scaling back of ambitions for an eventual agreement on CO2 limits. At the end of the day, this means fewer fuel cost savings for consumers. This last-minute intervention at the highest political level is a clear case of the concerns of a handful of companies taking precedence over consumers’ interests.” Moreover, Mrs Francizka Achterberg, campaigner of Greenpeace, commented on this unorthodox interference of Mrs Merkel: “Chancellor Merkel has shown that she’s not afraid to hijack democratic processes and bully other governments to pamper a few high-end car-makers”.

Greg Archer of Green Transport Campaign Group (T&E) commented on the German tactic to put a pause in the whole project: “It’s unprecedented in EU environmental policymaking that the pressure of one country delays a vote in an attempt to overturn a fairly-negotiated agreement between the European Parliament, the Commission and the Council itself,”… “It is ludicrous for Germany to claim it needs more time, as the 95g target was agreed five years ago and Germany has already put forward five different proposals that have been rejected by the vast majority of EU countries.”

Moreover, even people from the same lobbying table stood up to condemn Mrs Merkel’s unacceptable political interference. Particularly, Ford Motor, feeling significantly neglected in this German lobbying feast, made an official corporate announcement on the issue: “As a company committed to meaningful CO2 emission reductions through advanced technology, Ford is disappointed. We will now have to regroup within the industry to determine the next steps”.

The tip of the Iceberg

The German Chancellor is nothing but the tip of the enormous iceberg of German lobbyists that try tirelessly to postpone the agreement on the 95g 2020 target. The German side sees as a potential threat to profit share the fact that their European main competitors such as the French Peugeot Citroen Group and the Italian Fiat Group have been lately focusing mostly on small low CO2 cars, while the German manufacturers are known for their relatively bigger cars with substantial CO2 emissions. Thus Volkswagen, BMW and the peer are afraid that if the market game goes to very low emissions, then they would potentially lose market share from the other players of the industry.

Thus, the German side is supporting heavily the expansion of the so called “super-credits” scheme. According to this scheme, in order to comply with the EU norm for average low CO2 emission, the hybrid low emission cars are more significant in the estimation of the average than the luxury big ones. Ivan Hodac, secretary-general of the ACEA, believes that “the credits would “give industry an incentive to put the cleanest possible vehicles on the market.”… ”So as an incentive to the industry for developing these vehicles, we see the super-credits as being one of the best means for doing that.”

This scheme is supposed to come to an end after 2015. However, the Germans want to expand it until 2023 and also create the possibility to ‘bank’ super-credits from earlier stages of the program to use them after the 2020, when the CO2 targets will be even more exhaustive. However, the Commission, even though it accepted to reintroduce the super-credits from 2020, they decided to do so in a more limited way than what the German industry seeks. The extension of that scheme would give them the possibility to produce more big and luxurious cars. Consequently, given that the expansion has not been accepted, Merkel came out to bluntly protect her big car voters by stalling the decision process, at least until the September German elections.

More German Green Sins

While two weeks ago we were holding our breath while watching Merkel making calls intimidating people, only last week we heard about another provocative and scandalous stance of the German government in favour of notorious car polluters. Unfortunately for the Germans, it was not an Irish that “picked up the phone” this time but a French.

Last week France turned down the registration process of several Mercedes models assembled since June 12. Consequently many luxurious Mercedes A Class, B Class and SL Class were stuck in the dealer’s stock and did not receive the yellow French plates. According to the French authorities, those models contained an air conditioning coolant that was forbidden by an EU regulation.

While Daimler’s spokesman came out surprised to say that the company has “no explanation for why the registration in France was not yet accepted”, we would like to remind him of the 2006 EU law that dictates that the air-conditioning gas in European cars should be replaced by a chemical that has significant less global warming effects. Currently the only coolant in the market that complies with the EU directive for green house gases is the so called “1234yf” and this is the coolant that all car makers in Europe use. All but the German car company Daimler.

Daimler (Mercedes) and Volkswagen have denied to use this friendly to the environment coolant and keep using expensive CO2 based ones with the pretext of passenger security. According to the German car manufacturers, the 1234yf can be the primary cause of car fire and hence they decided to take their own way one more time. However, Opel has performed meticulous tests on this coolant and found no proof that relates it with the possibility of car fire during collision.

As expected, this new German obsession to evade EU Green norms has received severe criticism. Particularly, the British MEP Chris Davies argued: “A number of Mercedes cars are now being sold that don’t comply with EU law and if the Commission takes action we don’t know what will end up happening to them. EU environment laws only work if they are fair to everyone and by letting Daimler off, Germany is being unfair to manufacturers from France to Spain to the Czech Republic. Given the number of cars and car parts manufactured in my own North West England constituency I’m glad the Commission are taking a tough line. We can’t build a stronger economy if some countries won’t play by the rules… A fine for Daimler won’t be enough – there needs to be a recall of all the illegal cars.”

Exchanging CO2 with votes

Why does the German government tolerate this unseen EU norm violation by Mercedes? Is it because Mercedes has very beautiful cars, marvels of modern engineering, and hence deserve extra attention? I am afraid it is the same reason why Merkel picked up that phone a couple of weeks ago and asked from the EU presidency to slow down the CO2 emission regulation. Germany, a country that is generally marketed as one of the most Green member states, unfortunately when it comes to choose between environmental protection and business growth, the choose the latter. “Green” actions are good in Germany only when they can be used by Corporate Social Responsibility campaigners to boost the brand image of a company. Instead, when there is even the slightest probability that a decisive reduction of CO2 for the common good of the planet would entail a compromise of profitability or competitiveness, then EU laws exist to be broken.

That policy makers need to listen to the voice of the market and find the golden cut that will be a beneficial regulation for the European citizen without harming significantly business growth is highly understandable. That European businesses, though, can be supported by top EU leaders to harm the environment and the lives of the citizens is preposterous. What Merkel did a couple of weeks ago is not just an action under panic by a politician receiving extreme pressure by the top cast of her voters. The way Merkel paused democracy in Europe to serve the interests of Daimler and Volkswagen actually reveals who is finally managing Germany and consequently Europe nowadays.

The purpose of this story is to thoroughly inform the Europeans on how political decisions are made in the EU; the Europeans that have the tremendous democratic power of vote, to define their present and future. Even if we do not all know or understand what super-credits exactly are or how they work, we all need to remember the moment democracy in Europe froze at the end of June 2013 so that some companies emit to the polluted European atmosphere a couple of grams of CO2 more.