Germany went ‘rogue’ to freeze green cars law, say diplomats

Diplomats from several EU states have accused Germany of using threats, intimidation and blackmail to sideline green cars legislation in an unprecedented display of hubris within the Brussels’ corridors of power.

EURACTIV has heard allegations that the German Chancellor, Angela Merkel, used what one diplomat called “nasty pressure” against EU countries to stall debate on new regulations aimed at limiting car emissions to 95 grams of CO₂ per km by 2020.

Rumours have circulated that Merkel threatened future bail-out funds to Dublin, in a phone call to the Irish Taioseach, Enda Kenny, the night before a 27 June EU Summit was scheduled to vote on the package.

One credible source, speaking on condition of anonymity, told EURACTIV that in the phone call, “pressure was being applied [on Kenny] that related to the current economic situation and banking crisis.”

Others say the German demarche went further, and was not contained to Ireland.

“You can always have trade-offs and fair or unfair games exchanging support for some file or another,” one diplomat told EURACTIV. “But in this case it has mostly been threats and intimidation and you can’t fight that. People do what you ask only out of fear.”

The official claimed that Hungary was won to Germany’s position by threats of German car plant closures in that country. The Netherlands and one other member state also received warnings that future BMW investment in MINI plants would go elsewhere, if they voted incorrectly.

“It is rogue behaviour for a member state,” an EU source said.

In the hours before the 27 June summit, Berlin persuaded France to support postponing the vote by committing to bring it back unchanged in the weeks ahead.

EURACTIV understands that the UK also agreed to support Germany’s manoeuvre, after a quid-pro-quo was offered of German quiescence in the stymieing of a planned vote on the UK’s budgetary rebate at the summit. 

Policy-making integrity

But neither country is thought intrinsically sympathetic to Berlin, and another postponement of debate on the green cars law until after German elections in September, at a Committee of Permanent Representatives (Coreper) meeting on 17 July, was not warmly-received. 

“It is a really bitter feeling,” one diplomat said. “People are just stunned at the way it is evolving.”

Another source spoke of a “strong degree of ill-feeling towards Germany with regard to their antics on the CO₂ in cars file, which have no precedent to my knowledge."

“There is bad blood within Council over this,” a third diplomat confirmed. “Some member states are becoming very agitated about this as it undermines the whole negotiating process between Council and Parliament in particular.”

At a European Parliament meeting in early July, the German MEP Matthias Groote (S&D) said that if a deal on the legislation could not be conducted quickly, “this would have serious knock-on effects for other trilogues” currently being conducted.

Trilogues are three-way meetings between the European Commission, Council and parliament to agree the smooth passage of legislation.

Veiled threat

“There was a veiled threat there,” a diplomat said. “It could be that in future, any trilogues will be conducted at a lower level of cooperation between Parliament and Council, or in concluding agreements under the Lithuanians.”

Others doubt that it will come to a campaign of disobedience, not least because MEPs - including Groote - have key packages to legislate, such as the ‘backloading’ of the EU’s Emissions Trading System.  

Even so, EURACTIV has learned that the representative of Catherine Day, the European Commission’s Secretary-General, expressed concern about the integrity of the policy-making process. 

It is considered highly irregular for a mandate approved by a qualified majority vote to be removed from the table in such circumstances.

Inevitably, speculation has focused on why Germany would spend such political capital on a file which is generally seen as an inoffensive compromise deal.  

German auto-power

German car manufacturers such as BMW and Daimler want a more generous application of ‘super credit’ provisions in the current legislation, which they say would incentivise the manufacture of low carbon cars.

Environmentalists on the other hand, see the super-credits as a trick to water down the existing targets, and riddle them with loopholes. The final give-and-take offered both side something to carry home.

But “Merkel needs to keep her image with BMW and Daimler until after the election, and a promise that she made to them,” one EU diplomat told EURACTIV.

Germany's car industry is not without influence. One of Merkel’s ministers, Eckart von Klaeden, recently announced that he was quitting politics to lobby for Daimler AG. The external affairs chief he is replacing will become the new German ambassador to Afghanistan.

“It could be about campaign funding,” the diplomat said.

Campaign donations

In 2013, Daimler gave €100,000 in campaign contributions to both the Christian Democrat (CDU) and Social Democrat (SPD) parties in Germany, down from the €150,000 they gave in the two years previously.

BMW though has given nothing to Merkel’s CDU this year – compared to €57,048 in 2012. Instead, it offered €143,817 to the Christian Social Union in Bavaria, €107,376 to the SPD, and €69,081 to the Federal Democratic Party. 

BMW is also providing Lithuania with 180 free new cars for the duration of the country’s six-month rotating presidency of the EU, via its authorised representative, Krasta Auto. 

Greg Archer, a spokesman for the green think tank Transport & Environment, said that it was time for other member states to act in the wider European interest.

“Germany is abusing its political power to block a vote on a fairly-negotiated agreement,” he said, in emailed comments to EURACTIV. “The deal must be confirmed as soon as possible without further amendment. Europe’s drivers and its environment can't afford to wait any longer.”