European Union governments have stubbornly refused to tighten oversight of the auto industry despite pleas from environmental advocacy groups. Now Germany is paying a humiliating price for this after being snubbed by Fiat, which was backed by the Italian government.
No EU government looks good when it comes to how they oversee the industry, which is a key provider of jobs, but Germany appears to be the worst. Years of blatant industrial politics have given its automakers an easy ride at the expense of the wider population.
By nurturing non-accountability, the Berlin government created an environment where Volkswagen engineers thought they would get away with cheating official emissions tests.
German Transport Minister Alexander Dobrindt is considered by many opposition politicians to be a lapdog of the domestic carmakers. When he criticized Fiat for not attending a meeting to discuss environmental campaigners' claims that its 500X model had excessive emissions of health-harming NOx pollutants, Fiat showed defiance and even disdain.
European automakers can pick and choose which national agency homologates their cars for EU-wide sales, a system that lends itself to lax oversight.
Fiat concluded it only needed to answer to its own type-approval authorities at home in Italy - an attitude that German automakers would likely also have adopted if the situation was reversed. Italian Transport Minister Graziano Delrio backed Fiat, saying German authorities should address the issue by contacting Italian regulators and not the company directly.
If this happened in the United States, Fiat Chrysler CEO Sergio Marchionne wouldn’t have dared pull such a stunt. However, the German government deserves the Italian rebuff for protecting industry jobs and its own tax revenue base rather than public health.
For years the transportation ministry and its type-approval agency, the KBA, bent over backwards for domestic automakers including Volkswagen. Germany’s TUeV Nord, an independent testing agency, complained it could not inspect engine management software after legislators agreed with the industry's argument that the bits and bytes controlling tailpipe emissions are corporate secrets.
Freezing out French, Japanese
Berlin also subsidized an infrastructure network of so-called CCS charging stations in Germany for electric cars but specifically left out those that included sockets for CHAdeMO plugs widely used by Japanese and French brands. Chancellor Angela Merkel sought to disadvantage mass-market models such as the Nissan Leaf EV and Mitsubishi Outlander plug-in hybrid.
The KBA retroactively reclassified the homologation for a revamped Mercedes A class as an existing rather than new model to allow the Europe-wide sale with a phased-out refrigerant banned under EU rules.
The absolute low point was Merkel's last-minute veto of tough targets for CO2 emissions for 2020 at an EU summit three years ago. By that point France had had enough. It banned the registration of Mercedes-Benz cars with the old refrigerant, forcing Mercedes parent Daimler to take the case to France's highest court to win a reversal of the ban.
After turning a blind eye to industry practices for years, Berlin now wants to reclaim moral authority. But who can take it seriously at this point? The latest theatrics in the industry’s ever-widening emissions scandal risks discrediting both automakers and the regulators tasked with their oversight.
Merkel will have to intervene personally to resolve the standoff. All of this would have been avoidable if the EU had been in charge of what is a single market issue.
EU governments - especially heavyweights like Germany - should agree to the establishment of a single, independent authority to test vehicles in the bloc similar to the U.S. government's Environmental Protection Agency.
The Brussels-based Transport & Environment group is lobbying for this. Otherwise the regulatory arbitrage that T&E's air quality manager, Julia Poliscanova, this week called a "race to the bottom" among national regulators will continue.