As a country that manufactures lots of big cars, Germany had the most to lose from EU plans to limit emissions. But the German car industry has welcomed an alternative German-Franco deal as "an acceptable compromise."
German carmakers worry tough emission limits could hurt luxury manufacturers like Daimler
The compromise, which trades carbon dioxide emissions efficiency for the use of green technologies, was reached on Monday, June 9, and received a cautiously positive reception from the bloc.
"We welcome the convergence of views between members which have big car industries but it's a discussion that takes place within the council, with all members," said European Commission spokesman Amadeu Altafaj.
On December 19, the commission proposed rules limiting the average CO2 emissions of all new cars in Europe to 130 grams per kilometer driven by the year 2012 -- the 2006 European average was 160 grams per kilometer.
That drew criticism from German Chancellor Angela Merkel and German carmakers. But in consultations with French President Nicolas Sarkozy, a compromise was put forth whereby auto manufacturers could receive 8 kilograms per kilometer in "green credits" for using environmentally friendly technologies such as solar power.
Merkel and Sarkozy saw eye to eye on the alternative CO2 proposal
The German-French proposal represented "a clear improvement on a proposition by the European Commission," Matthias Wissmann, Head of the German Automobile Association VDA, told dpa news agency.
BDI confederation of German industry spokesman Werner Schnappauf called the deal an "acceptable compromise," paying tribute to Merkel for "forcefully representing" the German car industry.
"Not everything is clear," added Ferdinand Dudenhoeffer, a German car specialist. "But the solution is softer. The targets will be easier to reach."
The German car industry is fearful that tough emission targets could disproportionately penalize luxury cars manufacturers like Daimler, BMW and Audi with their relatively high fuel consumption and emissions and favor French and Italian makers of economy cars.
Merkel insists the limit should apply across the range for each carmaker, leaving carmakers the possibility of continuing to introduce high-emission luxury models, so long as they compensate by making low-emission models.
But Germany's environmentalist party, the Greens, were predictably less than happy about the Commission's original proposal potentially being watered down.
German media quoted Green Parliamentary Co-Leader Renate Kuenast as saying that Merkel had "once again signed off on all of the German auto manufacturers' propositions."
The Franco-German agreement "meant nothing good for climate protection," she added.
But nothing firm has been decided. While welcoming attempts by Germany and French to bridge differences, the EU also said that those two nations could not decide the issue alone.
"The process is still underway," Altafaj said.