Germany goes soft on Volks Wagon

BERLIN: As a diesel emissions scandal grips Volkswagen, German politicians and regulators have handled the nation’s motoring icon with kid gloves in contrast to a crackdown by authorities in the United States.In a bid to try and limit the damage to the cherished ‘Made in Germany’ brand, Chancellor Angela Merkel used a major speech last week to promise to stand by the auto sector, which provides one in seven German jobs.Stephan Weil, premier of the state of Lower Saxony, where VW has its headquarters, spoke highly of the car maker on Tuesday, describing it as a “a pearl of German industry” and a company worth fighting for.Meanwhile, German regulators have made only the briefest of statements on the scandal, preferring to focus on how to fix the problem vehicles.

It follows a pattern of relatively soft regulation in Germany.While U.S., UK and EU regulators imposed billions of dollars in fines and settlements on banks in the wake of the financial crisis, including on Germany’s largest lender Deutsche Bank, German financial watchdog Bafin has largely stood silent.In the Volkswagen case, Bafin has opened a “routine probe” into the circumstances around the announcement of the emissions rigging.

This despite questions over why Volkswagen waited more than two weeks to go public with the cheating after formally acknowledging the deception during a conference call with U.S. regulators on Sept. 3.In Germany, the responsibility for approving new vehicles falls to the KBA motor authority, which also checks that cars meet environmental standards. This contrasts with the United States, where emissions are regulated by the Environmental Protection Agency (EPA), a body at arms length from the motor industry.


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