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Economy First: EU Climate Policy Falling Apart

Joshua Chaffin and Peter Spiegel, Financial Times

The EU has bowed to pressure from Chancellor Angela Merkel to postpone an agreement on tough new curbs on auto emissions that have been fiercely contested by German carmakers.

The delay is the latest in a series of EU policy hold-ups that diplomats attribute to Germany’s focus on parliamentary elections scheduled for September 22. Goals for a summit of EU leaders in Brussels beginning on Thursday have also been scaled down under pressure from Berlin.

Officials from the European parliament and member states on Monday agreed legislation introducing new curbs, and the deal was to have been endorsed by EU governments at a separate meeting on Thursday.

Yet Enda Kenny, prime minister of Ireland, the current holder of the EU’s rotating presidency, took the unusual step of removing the emissions deal from the agenda after a personal appeal from Ms Merkel, on Wednesday.

Ms Merkel phoned Mr Kenny after German diplomats were unable to secure sufficient support from fellow member states to block the legislation or amend it to their satisfaction.

Germany’s heavy-handed tactics have sparked outrage among those governments that support the new rules, which requires automakers to limit their fleets’ average carbon dioxide emissions to 95 grammes-per-kilometre by 2020.

France, Italy, Denmark and others were mounting a furious counter-attack on Thursday morning after learning of the Irish decision.

The fight over the emissions legislation has added an extra wrinkle of tension to the two-day summit beginning on Thursday.

EU officials worry that if the agreement were to be postponed – even if only beyond the German elections – then some diplomats worried that it could fall apart altogether. Any change to the text could unpick a fragile compromise that also includes the European parliament and the commission.

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