Bursting the Bubble

What the Volkswagen scandal reveals about the EU?

8 February 2016 | by

The scandal duly dubbed as Dieselgate, which erupted last September when US authorities found that Volkswagen cars were equipped with a special software to cheat emission tests, does not only raise serious doubts about the ethical conduct of one of Europe’s flagship companies, but also highlights a whole range of structural problems that paralyse the EU.

The very fact that these malicious practices could take place in Europe in the first place, as well as the subsequent and ongoing efforts to handle the issue, have showcased perfectly a series of systemic institutional weaknesses that vitally need to be addressed if we are to have a well-functioning European Union. The scandal may well be looked at as a symbol of what needs to be done in order to have a healthy single market with a fit-for-purpose decision-making mechanism, as opposed to an EU where unclear competencies lead to finger-pointing and Eurosceptic populism.

The European Parliament has decided to set up an inquiry committee into the scandal, and it has narrowly rejected in February on an objection to a controversial implementing act, which would introduce real driving emission tests. All agree that new, on-the-road testing methods are needed to avoid fiddling with test results, but the measure in question will also impose transitional NOX exhaust limit values to allow for adjustment to the new tests and for potential statistical errors. The implementing regulation, which passed Parliament’s scrutiny by a tight margin, will allow manufacturers to exceed NOX limits, adopted already back in 2009, by 110% until 2017 and 50% from 2017 to 2019.

 

Mythical comitology and finger-pointing

One of the main issues the scandal raises is that of the obscure comitology procedure. While most of the EU legislative procedure is far more transparent – even if more complicated – than law-making in many national capitals, the comitology committees composed of national experts most definitely add an element of obscurity to it. While these bodies were called to life to specify technical elements of the law; we are yet again faced with a situation when the outcome is the result of behind the scenes political deal-making by national delegates. It is no secret that the final transitional values are quite significantly different from the proposal of the Commission, which already tried to take account of widely differing national views. The procedure, which should function as a forum of experts to adjust technical details based on the latest scientific evidence, has been turned into a place where national interests clash behind the scenes. It is hard to argue that allowing the more than twofold excess of legally binding targets adopted over six years ago is not a political compromise and changing of the very meaning of the law.

And that brings us to the second point: pointing a finger at the European Commission. Thanks to the complexity of EU legislative procedures and the lack of awareness about them in Member States, it is already too easy for populist Eurosceptic politicians to blame the EU, “Brussels”, or the “technocrats” of the Commission for everything. Add to that the perception of a comitology decision as the Commission’s autocratic rule-making, and we have the perfect case for an anti-EU campaign. But in reality it was exactly the Member States that blocked a more ambitious deal in a supposedly expert procedure, even amidst the stirred up public opinion that followed the finding that at least one of the major car producers has been lying to them and making profits on endangering human health. National capitals could easily decide to do so as a result of the lack of transparency and the fact that the agreement is now treated as a Commission decision: and indeed it is now up to the Commission alone to try and defend the compromise of the Member States. EU and national competences are already often unclear, and twisting the procedures according to political rationale will only contribute to creating a situation when nobody shoulders the responsibility at the end.

 

Poor implementation, no enforcement

There is no evaluation of any European policy without underlining serious shortcomings in implementation, even years after adoption of the legislation. The Commission as the guardian of the treaties is then routinely criticised for not enforcing legal obligations, but in reality it has no measures to do so. They can of course launch an inquiry and eventually take the case to court, but by the time it is settled (mostly by last minute implementation), the wrongdoers have already gained years to carry on with business as usual and often create unfair competition as a result.

The situation is essentially the same in the Volkswagen scandal. There has been binding EU law for lowering emissions from passenger cars, and there have been provisions to overhaul testing methods that were long known not to be trusted. But the law was not properly enforced. The explanation is simple: we have EU-wide rules, but most often we do not have EU-wide enforcement authorities. There are 28 national authorities that are tasked with ensuring that new cars on the market meet the emission limits: there is no one central check or even a European oversight body. In a situation when those who fail to implement or strictly enforce rules end up with a market advantage with little to no consequences, national authorities might not even be interested in providing proper oversight, knowing it would put national industry at a disadvantage. This paradox brings us back to finger-pointing, as the Commission is then set to take the blame for not enforcing legislation, while it is equipped with no means to do so and the duty of implementation lies  on the national level in the first place. At the end of the day the problem is very similar to the one behind the Euro crisis: we have common rules and common structures, but the responsibility of enforcement is scattered.

The handling of the scandal in general, and the ever-lasting procedure for setting up on-the-road emission tests in particular, has shown how part of the EU procedures and structures are outdated, not corresponding to the level of common law-making that integration has produced. To have a fully functional and effective acquis communautaire, we need more transparency, and above all clearly established competencies and procedures that entail responsibility.  Furthermore, it is only with creating explicit European enforcement tools that we can overcome the continuous clash of national interests as well as the resulting implementation issues, ending up with European laws that make differences to the lives of European citizens.

What do you think?