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Business

Germany, France Resolve Row Over Car Emissions

France and Germany reached a deal Monday resolving their months-long dispute on EU-wide plans to reduce car emissions, German Chancellor Angela Merkel said.

Traffic jam

Some cars pollute more than others

"We have made an important breakthrough on this subject where initially our positions were very, very far apart," Merkel said at a Franco-German summit in the southern German town of Straubing.

"I am very happy to be able to say that we both support the EU goal of 120 grams per kilometre on all new EU cars by 2012."

Merkel said the countries would agree to a European Commission goal of cutting carbon dioxide (CO2) emissions for new cars, but would allow a longer phasing-in period for older cars. Germany has been concerned that planned European Union rules will put its luxury automobile industry at a disadvantage.

French President Nicolas Sarkozy joined Merkel at the press conference. The announcement was a surprise as the two countries were seen as still being too far apart for a compromise to be found.

Different cars, different concerns

French President Nicolas Sarkozy, right, and German Chancellor Angela Merkel smile

They found an acceptable compromise

Germany and France build very different types of cars. German companies like BMW, Daimler and Porsche tend to sell larger, luxury vehicles with higher emissions. French carmakers like Peugeot and Renault sell a larger percentage of smaller cars which pollute less.

The deal supports an EU goal to limit emissions to 120 grams per kilometer starting in 2012. Berlin and Paris have been looking for a compromise on burden-sharing of CO2 reductions for months.

"The details will still have to be worked out by our environmental ministers but we believe that this is a giant step ahead," Merkel said. "We have proven again that France and Germany can work together. We have agreed to work together."

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