Page 46 - Bloomberg Businessweek-October 29, 2018

◼ POLITICS Bloomberg Businessweek October 29, 2018

gasoline-powered cars, releasing less carbon diox- for too long,” Finance Minister Olaf Scholz—whose ● German new-vehicle
ide. But that comes at the cost of nitrogen oxide Social Democratic Party saw its support in Bavaria registrations by fuel
emissions that have been linked to heart disease, fall by half—said at an engineering conference in Sept. Sept.
strokes, and respiratory problems. Environmental Berlin. “We have to do something.” 2015 2018
groups have lodged dozens of anti-diesel lawsuits, The future of diesel has dominated the cam-
and judges have ruled in favor of limiting the use paigning for Oct. 28 elections in Hesse—the state Petrol
64%
of diesels in a half-dozen cities, including Berlin, that includes Frankfurt. The issue has given a
Frankfurt, and Munich. “Merkel has totally mis- boost to the Greens, who’ve climbed above 20 per-
judged the problem for a long time,” says Jürgen cent in recent polls—just a few points behind the
Resch, executive director of Deutsche Umwelthilfe, Christian Democrats and neck and neck with the
an environmental group that’s brought many of Social Democrats. If either governing party suf-
the lawsuits. “The government totally surrendered fers a convincing defeat in the western strong-
to the auto industry.” hold of centrist, middle-class voters, Merkel might Diesel
Merkel acknowledges she must maintain a face pressure to give up the leadership. And the 29%
strong dialogue with the automakers, but she Social Democrats could decide to quit the coali-
insists that she hasn’t gone easy on them. Industry tion rather than continue to be tarnished by their
executives, though, fear they may be losing the association with the chancellor. “Merkel has always Hybrid
chancellor’s ear at a time they need it more than postponed the issue” of cleaning up the auto indus- 5%
ever. The big German brands are stepping up try, says Sören Bartol, a lawmaker from the Social Electric
spending to develop electric cars to meet stricter Democrats responsible for transportation policy. 1%
rules on emissions, and they’d been counting on “Now the public is furious, and this is becoming a
diesel to meet CO2 targets and fund the transition political problem.” �Birgit Jennen, Karin Matussek,
to battery-powered vehicles. and Elisabeth Behrmann
In early October, Merkel called on auto-
makers to update older engines to be less pol- THE BOTTOM LINE A growing number of court rulings calling
for bans on diesel cars in German cities have put Merkel on the
luting. Manufacturers say that would be hugely defensive and highlight the increasing frailty of her government. 41
expensive—as much as €5,000 ($5,700) per car—and
that it’s smarter to subsidize purchases of cleaner
vehicles. They advocate a strategy like the “cash-
for-clunkers” programs in Germany and the U.S.
a decade ago, which offered an outsize trade-in Poland’s Populists Are
value for older cars.
But Merkel is facing growing voter anger over Suddenly Vulnerable
potential restrictions, which could affect almost
10 million diesels. A mid-October poll from YouGov
Plc found that three-fourths of Germans say the ● The opposition rallies after Law and Justice fails
chancellor hasn’t done enough to fend off driving to build on its stunning 2015 victory
bans. So on Oct. 21, Merkel proposed a law to make
it more difficult for courts to limit the use of die-
sels. “We should avoid driving bans wherever pos- If politics is all about keeping control of the nar-
sible,” she said in a podcast. rative, Poland’s nationalists just got a glimpse of
Merkel’s flip-flopping on the issue illustrates her what can happen when you lose it. The seemingly
scrambling to shore up her waning influence on impregnable political machine that’s stamped its
German politics. In national elections a year ago, authority on the country over the past three years
her Christian Democrat alliance saw its share of the and defiantly faced down castigation from the
vote fall to its lowest level since 1949, and it took European Union has shown it has vulnerabilities.
five months to cobble together a government, with A painful few weeks saw the prime minister
the center-left Social Democrats. Since she started embroiled in a scandal over disparaging comments
her fourth term as chancellor in March, Merkel he made during his past life as a banker and the
has faced frequent squabbling in her coalition strongest rebuke yet from the EU over Poland’s over-
and a virulent challenge from the anti-immigrant haul of the courts. They culminated in a lukewarm
Alternative for Germany, or AfD. In Oct. 14 elections endorsement from voters for the governing Law and
in Bavaria, her bloc faced another drubbing, with Justice party as it failed to gain all but one of the big
the AfD reaching 10 percent and the Greens surging cities in local elections. In Warsaw, the main outpost
to 18 percent. The diesel issue “has been ignored of the opposition, Law and Justice was trounced.