Diesel crisis could hurt Germany’s economy

The German government touched upon the “Diesel crisis” this Monday, saying that it now should be considered a seriously potential major risk to future growth of this country.

In the August monthly report, the finance ministry decided to put the "diesel crisis" into the list of economic threats including potential negative impacts from UK’s Brexit and President Trump's protectionist stance on trade. The report said that Germany should have a deliberate look on this scandal and better classify it “as a new risk”, despite the fact that its possible negative effects on German economy could not be appraised at present.

The diesel scandal began about two years ago when Volkswagen was detected cheating on emissions tests by manipulating software to make its car engines appear far cleaner than they were. In April, this automaking company had to pay a $4.3bn penalty in the US and must itself spend $11bn to retrieve their polluting cars & offer other compensation. The other German carmakers such as Audi, Mercedes, BMW and Porsche were also involved and have been investigated for trying to do the same.

Germany is being considered Europe’s largest economy with a substantial growth rate. It’s undeniable that Auto industry – the biggest export sector of this country, which currently supports about 800,000 jobs, has contributed a capacious part of German economic growth. “Made in Germany” brand has been acknowledged high-quality and reliable since and that’s the reason why this scandal was hardly imaginable. German politicians and car bosses were unanimous after a meeting last month to re-examine engine software on more than 5 million diesel cars to cut pollution, trying to fix the industry’s reputation.
See also: