Suzuki’s suit against Volkswagen had precision timing. Or was very lucky. Volkswagen is heavily distracted by another suit, namely the EU Commission against the Federal Republic of Germany. Casus belli: The VW law. As indicated last week, Brussels is dragging Germany in front of the European Court of Justice. Brussels demands that the “special treatment” for Volkswagen is to be dropped. If the suit is successful, and if Germany remains obstinate, then a penalty of at least €46.6 million ($62.2 million) is demanded. A bargain, considering the hundreds of billions which are being moved around to avoid a meltdown of Europe. The fine would have to be paid by the German government, not by Volkswagen, writes Automobilwoche [sub]
Volkswagen’s home state of Lower Saxony is holder of 20 percent of Volkswagen shares. The state has a veto right, courtesy of the VW law. That veto right protects Volkswagen from unwanted takeovers. Usually, such a veto right needs 25 percent, and Brussels insists on putting Volkswagen and Germany in compliance. The suit triggered an onslaught of angry invectives from Germany. Said David McAllister, prime minister of Lower Saxony:
“At a time when the European Commission should be courting people for greater acceptance, it kicks off a completely unnecessary contract-violation procedure. The timing of this is grotesque.”
McAllister, member of the Volkswagen supervisory board and also a member of the ruling centrist CDU party, finds himself in unusual solidarity with the left-leaning unions. Hartmut Meine, boss of the IG-Metall union in Lower Saxony, rants:
„EU Internal Market Commissioner Michel Barnier is a neo-liberal arsonist. He is trying to eliminate the successful model of enhanced co-determination at Volkswagen for pure ideological reasons. He wants to distract from the true problems in the EU.”
The timing indeed is peculiar. Currently, all attention should be on avoiding a crash of the European financial markets that would make Lehman look like a minor mishap. This needs the full attention and cooperation of all European governments and the EU commission. Picking a quarrel at exactly this point in time is more than grotesque.