The relationship between the car industry and Berlin, which some describe as symbiotic, is in the spotlight now, as the country's largest carmaker reels from an emissions scandal that forced out its CEO
Angela Merkel learned early in her political career that taking on the German car industry carries risks. It was the spring of 1995 and the newly appointed environment minister was trying to convince her cabinet colleagues to back a bold new set of anti-smog rules that included tougher speed limits and summer driving bans.
But Matthias Wissmann, the transport minister with close ties to industry, was having none of it. He questioned whether Merkel's measures would cut pollution levels at all and vowed to fight any attempt to impose speed limits on the Autobahn.
Wissmann's argument won the day, reducing Merkel to tears, according to a 2010 biography by Gerd Langguth. For the ambitious young minister from the communist East it was a lesson about how politics worked in a united Germany.
Much has changed in the intervening years. Merkel is now in her third term as chancellor. Wissmann heads the Verband der Automobilindustrie (VDA), the influential lobby group for German automakers. But there is one constant: the clout of the auto industry in German politics.
This relationship, which some describe as symbiotic, bordering on incestuous, is in the spotlight now, as Volkswagen, the country's largest carmaker, reels from an emissions scandal that has forced out its long-time CEO Martin Winterkorn and sent its stock careening lower.
There are no indications that German politicians were aware that VW was rigging its diesel emissions tests. Merkel and her leading ministers have expressed surprise and indignation at the revelations, urging VW to clear them up swiftly.
But authorities in Germany and elsewhere in Europe had known for years about the widening gap between emissions values measured in official laboratory tests and those recorded in a real-world environment. Yet, critics say, Berlin fought hard to shield its carmakers from closer scrutiny and, in a high-profile clash with its European partners two years ago, from tougher emissions targets. Merkel has defended the stance as necessary in order to protect jobs in the sector.
Some see the VW scandal as symptomatic of a deeper problem in which German car companies have been allowed to do as they please without oversight or fear of reprisals from Berlin.
"The Volkswagen scandal is a warning shot to the politicians," said Christina Deckwirth of Berlin-based Lobby Control. "It shows they need to spend less time protecting the auto industry and more time overseeing it."
There are good reasons why Berlin stands by its car companies. The industry employs over 750,000 people in Germany, has been a poster child for German engineering prowess and dwarfs other sectors of the economy.
In 2014, the big three carmakers, Volkswagen, Daimler and BMW, hauled in revenues of 413 billion euros, far bigger than the German federal budget, which stood at just under 300 billion. This has bred a cozy relationship between the industry and politicians. Top auto lobbyist Wissmann is a veteran of Merkel's Christian Democratic Union (CDU) who, despite their cabinet clash 20 years ago, uses the familiar "Du" with the chancellor. Daimler's chief lobbyist is Eckart von Klaeden, a senior CDU politician who worked under Merkel in the chancellery and whose abrupt switch to the Mercedes manufacturer in 2013 prompted an investigation by Berlin prosecutors and new rules on "cooling off" periods. His predecessor at Daimler was Martin Jaeger, now spokesman for Finance Minister Wolfgang Schaeuble.
The ties cross party lines. Thomas Steg, a former spokesman under Social Democrat (SPD) chancellor Gerhard Schroeder, heads up government affairs at Volkswagen. Even former foreign minister Joschka Fischer of the environmentalist Greens has done ads for BMW in recent years.
The political connections are particularly strong at Volkswagen, whose arcane shareholder structure is laid out in the "Volkswagen Law" which dates back to 1960 and has faced repeated legal challenges at the European level.
Premiers of Lower Saxony who have sat on VW's board include Schroeder, nicknamed the "Auto Chancellor", current Vice Chancellor Sigmar Gabriel and former president Christian Wulff.
The VW scandal has also exposed the toothlessness of Germany's regulatory regime, opposition parties and industry experts say. The main oversight agency for the car sector, the Federal Motor Transport Authority, falls under the Transport Ministry in Berlin, raising questions about its independence and readiness to police the sector. Meanwhile, German authorities has given scandal-hit Volkswagen an October 7 deadline to set out a timeline for bringing all its diesel cars in line with national pollution guidelines, a newspaper said Sunday.
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Research Associate at Center for Islam and Global Affairs (CIGA) at Istanbul Sabahattin Zaim University
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