German carmaker Volkswagen is nearing a decision to build a new plant in Turkey. Sources close to the company say the multi-brand factory would cost more than one billion euros.
The plant would likely produce 300,000 cars a year, the VW Passat and near-identical Skoda Superb models, for the local market and for export to Eastern Europe.
There had been several EU members willing to host the VW plant, including Hungary, Poland and, more recently, Romania and Bulgaria, but obviously the German company chose non-EU member Turkey.
VW’s argument is that Turkey is a candidate for EU membership. Formally, yes. But the country’s accession process has been frozen, in the face of human rights abuses, constrains of freedom of expression and rising authoritarianism under President Erdogan.
Another issue is the non-respect of EU state aid rules in Turkey, which has had the effect of a magnet for VW. Erdogan promises that the state will buy 40,000 cars for the use of its administration. In total, state aid for the project is estimated at €400 million, according to Reinhard Bütikofer, co-chair of the European Green party.
This Commission is trying to evade the answer and says it has no jurisprudence over issues of state aid in third countries. In any case, the outgoing Commission has obviously no time and appetite to open an investigation.
Now that the hearings of the proposed new Commissioners are underway, it would be very interesting to hear from them how von der Leyen’s executive would act in such cases, and in this particular one.
The question is relevant for Sylvie Goulard (Internal Market), Margrethe Vestager (as competition policy is still part of her wider portfolio named ‘Europe fit for the digital age’), Valdis Dombrovkis (‘An economy that works for the people’), Paolo Gentiloni (Economy), and, of course, Vera Jourova (Values and Transparency).
There will always be countries outside the EU bidding to attract EU manufacture – Saudi Arabia was also a candidate for the VW plant.
But this is not about protectionism. This is about corporate responsibility, and when it is lacking, of EU supervision and sanctions. There is also a big issue about how effective EU rules really are if it is so easy to circumvent them. It’s about how a foreign country’s dictator can make the entire European Union look hypocritical, greedy and stupid.
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Meanwhile, Hungary has decided to propose a new Commissioner after its candidate was rejected by the Parliament’s legal affairs committee. The latest news from Romania, whose candidate was also rejected by the Parliament, is that it will propose MEP Dan Nica. It remains to be seen if Ursula von der Leyen will acccept his nomination.
Von der Leyen still has a chance to chart a path to a fairer, greener, inclusive and prosperous Europe, but a group of more than 20 NGOs wonder whether she will really uphold those values.
Negotiations on the Commission’s proposal for the Common Agricultural Policy for 2021 are proceeding slowly and there is still no agreement on issues related to the environment or innovation. EURACTIV Germany takes stock of a workshop it organised on these issues on 27 September.
Still on farming: Europe’s small and medium-sized enterprises (SMEs) should have a role in delivering the new Farm to Fork Strategy, a comprehensive EU food policy outlined by incoming Commission President Ursula von der Leyen, said Austrian MEP Lukas Mandl.
Greece’s conservative government has decided to toughen its migration and refugee policy, following the death of a woman in the blaze at an overcrowded migrant camp on the Greek island of Lesbos.
Look out for…
More Commissioner hearings. Taking the stage on Wednesday: Reynders (Belgium), Dalli (Malta), Ferreira (Portugal), Goulard (France) and Lenarčič (Slovenia).
Views are the author’s
[Edited by Zoran Radosavljevic]