Germany, cherish the friends that tell you a hard truth

The recent case of Angela Merkel’s heavy-handed lobbying for more relaxed CO2 standards for BMW and Daimler is no exception. Indeed it poses wider questions about the future of the luxury (or so-called ‘premium’) cars Germany specialises in, and of Germany’s role in Europe.

 

It was after the badly-timed €690,000 gift from BMW’s main shareholding family to Merkel’s party that the story became irresistible and featured on the front page of the Financial Times and prominently in all top-tier German media including Der Spiegel and Bild, to name just a few examples. This was not just about environment policy, but about the influence big companies are seen to have over even the most confident heads of government.

 

Personally I am amazed at the amount of political capital Merkel chose to spend on this issue. In the midst of an election and government formation process, in the midst of a euro crisis which is far from over, she called a large number of fellow heads of government, all to get a few grams more of CO2 for BMW and Daimler.

 

And she didn’t lobby by the nicest means: it has been widely reported that Portugal and Ireland were pressured by referring to their bailouts, and that the British were bribed by German support for more relaxed banking rules (we don’t yet know why Poland and Estonia changed position). But it is costing her a lot. Many people from fellow EU member states are seriously annoyed about the German heavy-handedness, and even many Germans themselves now question whether the political establishment is too close to the car industry.

 

So is the manufacture of premium cars really as incompatible with CO2 standards as the Germans claim? Of course not. Daimler and BMW already get 10-15 g/km more relaxed CO2 targets for 2020 than Peugeot Citroën, Renault or Fiat, because their cars are heavier. They are Europe’s most profitable carmakers, so investing in low-carbon technology should be doable. They claim they lead on engineering; as the American fuel economy campaigner Dan Becker wrote in the New York Times: ‘They say that German engineering is the best in the world, and if it’s half as good as they say it is, they can meet these standards.’ We need to create a perception in Germany that ‘premium’ means ‘cleaner instead of dirtier’. Let’s not forget there is a clear self-interest in being the cleanest. After all, one of the reasons European diesel car technology has never gone global is that it did not pass foreign air pollution standards – others found diesel cars too dirty.

 

The Merkel government’s inelegant sabotaging of the 2020 CO2 limits seems at odds with its ambitious energy transition programme, the ‘Energiewende’. The problem is this climate initiative only applies to the power sector at the moment, which is responsible for around a third of CO2. In the transport and industry sectors, an ‘Energiestillstand’ (energy standstill) seems to prevail instead. That is strange, and should change. Plug-in or electric vehicles can also help store excess green electricity, one of the biggest hurdles the ‘Energiewende’ faces.

 

Germany’s role in Europe over the past few months has not been uplifting, which raises questions about its future role. Germany needs to find a way to marry newfound confidence (which is no bad thing) with empathy (which is indispensable). If it fails, resentment looms. That would be bad for Europe and, by extension, for Europe’s green policies. But it has risks for Germany and its car industry too. The other 27 EU member states are the Germans’ biggest market. It may be difficult if these friends tell you a hard truth – in this case that you have to clean up your act. But we all know that such friends – and not those you can binge-drink with – are the ones you can really count on in the long run.