With the spotlight bright on Volkswagen for cheating in emission tests, the EU's house bank must now come forward and show exactly what it has done to ensure proper oversight over its loans to the company.
Following the revelations around Volkswagen cheating emission tests, Bankwatch requested information from the European Investment Bank about its loans to the car maker. After delays, incomplete disclosure, and a frist confirmatory application, the bank released on December 18, 2015 redacted finance contracts between the EIB and VW as well as redacted completion reports provided by VW to the EIB at the closure of each project. (See all documents here.)
Documents obtained by Bankwatch provide more details for a European Investment Bank statement that its loans to Volkswagen may have been connected to the car makers use of cheating devices to rig emission tests.
Non-government organization CEE Bankwatch is not happy with the amount of information the European Investment Bank has provided regarding its lending to the Volkswagen Group in recent years. Bankwatch wrote to the EIB at the end of September, asking the bank to disclose documents related to the “green loans” it provided to VW, wanting to see loan contracts or evidence that VW used the money according to the conditions of the contract.
Following the revelations around Volkswagen cheating emission tests, Bankwatch requested information from the European Investment Bank about its loans to the car maker. After some delays, the bank released only part of the requested information, despite the profound public interest in the case.
In late September, shortly after news of VW's emissions manipulation broke, CEE Bankwatch Network contacted the European Investment Bank (EIB) with a detailed request to disclose information about its immense support to VW Group. In view of the profound public interest in the case, the highly insufficient responses we have received so far are particularly disconcerting. In this letter, Bankwatch therefore asks the EIB's board of directors to turn to the bank's Management Committee for the public disclosure of information related to EIB loans for the Volkswagen Group.
The dieselgate scandal is symptomatic of a ‘better regulation’ agenda in favour of cutting compliance costs and replacing the role of the public regulator with corporate co- and self-regulation. More than 35 civil society organisations have signed this letter calling for immediate and transparent investigations; EU oversight in the process of type approval for motor vehicles; strengthened enforcement of environmental legislation at EU and Member State level; the suspension of fraudulent companies from the EU lobby register until it has been demonstrated that they comply with EU law.
The European Investment Bank said Monday it is working to find out if any of its loans to Volkswagen to boost research into cleaner engines and other green technology were instead used to rig cars to cheat on emissions tests.
“We are looking into our exposure, we are looking into seeing where the individual loans have been used,” said Jonathan Taylor, the bank’s vice-president.
The Volkswagen Group received more than €4 billion in loans from the European Investment Bank over the last decade, with much of the money going to research aimed at developing cleaner engines.
The world’s largest carmaker is embroiled in a global scandal after installing so-called defeat devices in 11 million of its diesel cars to cheat on emissions standards tests, a scandal that has cost the CEO his job, opened the company to a potential fine of $18 billion in the U.S., pummelled the stock price, and prompted investigations across Europe.