Volkswagen’s emissions scandal and the EU’s bank
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.
Photo by stillwellmike - CC BY-SA 2.0
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Background
In September 2015, news broke that Volkswagen had installed defeat-devices in its diesel cars to rig emission tests, resulting in some models emitting pollutants up to 14 less in emission tests than what they did on the street.
Shortly after, Bankwatch uncovered that the European Investment Bank, the world’s largest public lender, supported the world’s largest car producer with 19 loans worth EUR 4.3 billion between 2005 and 2015.
Fourteen of the 19 loans were intended for improving fuel efficiency and reducing emissions. Out of them five were classified under the bank’s so-called ‘climate action’ lending.
Warnings from the past
Already in 2009, when billions of EIB funds were disbursed to European carmakers (including VW) in response to the financial crisis, Bankwatch warned that the EIB must ensure that the stated environmental goals of the loans, namely cutting carbon emissions from cars, are indeed implemented.
First tranche of EIB car “crisis” loans requires scrutiny, warn Bankwatch and Greenpeace
Press release | March 12, 2009
The underlying data for this graph can be seen and downloaded here. The source data is available on the EIB’s website.
Between 2005 and 2015, the EIB lent European automakers EUR 20.4 billion. Cars of at least seven of these companies showed considerably higher emissions in more stringent tests.
Read more:
Up in smoke: the billions for Europe’s auto industry from the EU’s house bank
Blog post | October 21, 2015
Online media briefing: Dieselgate at the EU’s bank
An investigation by OLAF, the EU’s anti-fraud office, has concluded that Volkswagen had misused a EUR 400 million loan from the European Investment Bank, confirming concerns raised by Bankwatch shortly after the Dieselgate scandal broke.
Watch Bankwatch’s EIB policy officer discuss the EIB’s role in the Dieselgate affair or read a Politico story on the OLAF investigation.
EIB reluctant to disclose information
Since September, Bankwatch is requesting the disclosure of information on the EIB’s loans to Volkswagen, in particular such that helps assess the bank’s performance in making sure its funds were not being misused.
In January 2016, the EIB’s president Werner Hoyer admitted that the bank cannot rule out that one of the loans to Volkswagen in 2009 has been used to finance a cheating device to rig emission tests.
Yet, until 2017, the EIB has not been very forthcoming and the disclosed information is still not satisfactory.
Trying to squeeze blood out of a stone
Bankwatch first contacted the European Investment Bank (EIB) in late September 2015 with a detailed request (pdf) to disclose information on 12 of its loans to the VW Group.
Almost two months later, and after failing to meet an extended deadline, the bank sent only finance contracts related to two outstanding VW loans. Much of these documents had been redacted by the EIB.
In view of the profound public interest in the case, the highly insufficient responses were particularly disconcerting. Bankwatch therefore asked the bank’s Board of Directors in a letter (pdf) to urge the bank’s management to disclose the relevant information.
On December 18, 2015, three weeks after a final confirmatory application, the last available resort within the EIB’s transparency policy, the bank provided redacted versions of all twelve finance contracts signed with the VW group and of the completion reports provided by VW to the EIB at the closure of each project. (See all documents in this Google drive folder.)
Read more:
New documents on European Investment Bank loans to Volkswagen
Blog post | January 18, 2016
Finance contracts and completion reports
Google Drive folder with documents related to twelve EIB loans to Volkswagen
Many files were still heavily redacted, making it difficult to interpret the information. For two loans Bankwatch therefore filed a second confirmatory application on January 25.
Latest news
VW got €4 billion in EIB clean technology loans
Bankwatch in the media | 30 September, 2015The 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.
Read moreFirst tranche of EIB car “crisis” loans requires scrutiny, warn Bankwatch and Greenpeace
Press release | 12 March, 2009The European Investment Bank (EIB) has today extended EUR 3 billion in soft loans to eight European carmakers for the development and production of cleaner vehicles. CEE Bankwatch Network and Greenpeace call on the EIB to ensure that money goes to initiatives with a true impact on cutting carbon emissions from cars and not just to small-scale greenwash projects.
Read moreRelated publications
Second confirmatory application for disclosure of EIB documents related to Volkswagen loans
Advocacy letter | 25 January, 2016 | Download PDFFollowing 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.)
Confirmatory application for disclosure of EIB documents related to Volkswagen loans
Advocacy letter | 24 November, 2015 | Download PDFFollowing 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.
Information on EIB loans to Volkswagen must be made public – letter to the EIB’s board of directors
Advocacy letter | 12 November, 2015 | Download PDFIn 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.
