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  • When is ein deal not a deal?

    This Comment by Greg Archer was first published by European Voice.The discussion on how to lower the average new car emissions by 2020 has been acrimonious and protracted. Even though improving fuel efficiency is a no-regrets policy with multiple benefits: cheaper motoring costs; improved EU-energy security and the creation of hundreds of thousands of jobs.

    The 2020 target was agreed in 2008 and the European Commission proposed minimal changes to the current system in the hope of securing a rapid agreement. Nevertheless, there has still been fierce lobbying to unravel the proposal led by Germany and its highly profitable, premium carmakers.

    In the European Parliament there were three principal points of discussion on which broad cross-party agreement was reached:

    1. The additional support given to electric cars should be more generous than proposed by the Commission, but capped (at 2.5g/km/pa) to limit how much this could weaken the regulation;

    2. A new system of testing fuel efficiency and CO2 emissions should be introduced by 2017 with additional checks on production cars to discourage test manipulation;

    3. An indicative target should be set for 2025 of 68-78g/km.

    In subsequent trialogue discussions with the then Irish Council Presidency and Commission, a slightly more generous system of supercredits than that suggested by Parliament was confirmed. Parliament’s proposal on testing was slightly diluted and its indicative target only included within a non-binding declaration. Neither NGO’s nor industry was entirely happy with the outcome, with T&E commenting that “the EU has made an important step forward to reduce climate-changing emissions from cars”, but that this could have been better “if Member States had focused on the significant long-term benefits of more fuel-efficient cars instead of being influenced by the narrow, short-term interests of some carmakers.”

    The hard-fought agreement was, however, short-lived. The night before the vote in Council to confirm the deal the German Chancellor, Angela Merkel, began calling the Irish and other heads of Government. Mysteriously, and almost without precedent, the item was then withdrawn from the agenda. The Irish Presidency ended without further discussion and the hand-grenade tossed to Lithuania. Presenting the Presidency programme to the European Parliament, Lithuania’s Environment Minister began by omitting the item from his address, but following intense questioning from MEPs (who highlighted BMW’s sponsorship of the Lithuanian Presidency) the Minister was forced to concede that the item would be discussed in Council on the 17th of July. Yet within days the item had been omitted from a second agenda.

    For an item to be omitted from one agenda may be considered misfortune; to be omitted from two agendas is decidedly careless [1]. The political manoeuvring illustrates how EU-decision and deal-making has become subservient to Germany’s desires, where BMW exerts an unhealthy influence. There are four principal reasons behind the Germans’ desperate moves:

    1. BMW, having invested heavily in the i-series of electric cars, says it has serious problems meeting its 2020 target without excessively generous supercredits. This is in contrast to VW which has confirmed it does not need supercredits at all;

    2. With elections approaching fast in September, and increasing anti-EU sentiment in Germany, appearing to fight for German industry against EU-driven regulation is attractive in the short-term – but in direct contradiction to Merkel’s previous support for low-carbon solutions;

    3. Merkel has recently recommitted to having one million electric cars on Germany’s roads by 2020 – a target that is widely seen as overly ambitious. Supercredits are, incorrectly, viewed as the saviour of this prestige policy;

    4. Germany cannot, currently, block the deal through forming a legitimate blocking minority and is buying time in the hope of garnering new support through high levels deals notably with Eastern European and indebted nations.

    Four German proposals to allow more supercredits have now failed to secure sufficient support in Council and pressure is building for the deal to be confirmed. Without a blocking minority the German Government cannot delay discussions indefinitely. Seven countries have actively supported Italy in calling for a quick resolution. Even the German vehicle manufacturers association (VDA) is divided, with Ford and others supporting the agreement. With few friends, and considerable animosity after heavy-handed lobbying, both Germany and BMW will eventually need to concede that they only have the political muscle to disrupt and delay but not destroy the EU’s consensus-building processes.

    Even if Germany can eventually buy a blocking minority in Council, it will still need to persuade both the Commission and Parliament to bend to its will. Neither of them is likely to concede willingly and if Council does abandon the agreed deal a new round of negotiation and deal making will be required that are likely to drag on into 2014.

    The failure of Council to sign off the deal may also have wider implications. The Commission has raised concerns about the integrity of the EU’s decision-making process. The Chair of the Environment Committee said to the Lithuanian Environment Minister that “a deal should be a deal” [2] and that, “this could have serious knock-on effects for other trialogues” if there is no trust between institutions. With the Parliamentary term ending in 2014, there is likely to be a need for quick agreements on a range of issues. The car CO2 law may not be the only legislation delayed and disrupted if Germany is unwilling to play by the rules of the game.


    [1] Reworked from Oscar Wilde the Importance of Being Ernest.

    [2] Mattias Groote MEP, Committee of the European Parliament on Environment and Public Health and Food, 9th May 2013, 10.30.