EU’s Schulz says Volkswagen scandal a “heavy blow” for German economy

BERLIN – Reuters

European Parliament President Martin Schulz. AFP Photo

The head of the European Parliament told a group of German regional newspapers that the emissions scandal at Volkswagen (VW) would hit the German economy hard but Europe’s biggest carmaker was likely to survive the crisis. 

Germany’s finance and economy ministers have played down the risk of a broader economic danger for Germany from the scandal. 

“It’s a heavy blow for the German economy as a whole,” Schulz, a German Social Democrat, was quoted as saying by the newspapers. 

“It’s hard to believe what was done there negligently and possibly even with criminal energy. But I believe that Volkswagen is a strong company that has every chance of surviving the crisis,” he said. 

VW has set aside 6.5 billion euros ($7.3 billion) to help cover the cost of the scandal, but some analysts think the final bill could be much higher. VW has said it will have to refit up to 11 million cars and vans containing illegal software. 

The car industry is crucial for Germany, Europe’s largest economy, where the likes of BMW, Daimler and Volkswagen employ more than 750,000 people. 

German newspaper Welt am Sonntag cited Hans Dieter Poetsch, Volkswagen’s incoming chairman as saying the scandal is a threat to the firm’s viability albeit a surmountable one.