Germany fines BMW $9.6 million over diesel emissions

The number of vehicles showing irregularities in BMW’s case is far smaller, at just under 8,000. (AFP)
Updated 25 February 2019

Germany fines BMW $9.6 million over diesel emissions

  • Authorities had been probing BMW since early 2018 over suspicions it could have built a so-called ‘defeat device’ into some diesel cars
  • The number of vehicles showing irregularities in BMW’s case is far smaller, at just under 8,000

FRANKFURT AM MAIN: German prosecutors said Monday they had fined high-end carmaker BMW €8.5 million ($9.6 million) over diesel cars with higher harmful emissions than allowed, while adding the infraction was down to error rather than deliberate fraud.
“Munich prosecutors have ordered a fine of €8.5 million for the administrative offense of negligence in quality control,” investigators said in a statement.
Authorities had been probing BMW since early 2018 over suspicions it could have built a so-called “defeat device” into some diesel cars.
Such technologies allow the vehicle to reduce emissions under test conditions, while emitting far higher levels of pollutants such as nitrogen oxides (NOx) on the road.
In Germany, Volkswagen has paid one billion euros in fines over defeat devices following its 2015 admission that it installed them in 11 million cars worldwide, while high-end subsidiary Audi has paid €800 million.
And last week, prosecutors in Stuttgart said they had opened a “fine proceeding” against Mercedes-Benz maker Daimler over the same suspicions relating to 700,000 cars.
But the number of vehicles showing irregularities in BMW’s case is far smaller, at just under 8,000.
Prosecutors said that they believed “mistaken labelling of the part of the motor control software responsible for exhaust treatment” was behind increased on-road emissions.
“Extensive investigations” had found neither evidence of a purposely designed defeat device, nor of intent to commit fraud by BMW employees, they added.
Rather, “the company had not set up an appropriate quality control system” that could have prevented the error or revealed it after the fact, the prosecutors found.
In its most recent financial data release, BMW said it made a net profit of €1.4 billion between July and September, down 24 percent year-on-year as it contended with tough new emissions tests in the European Union.


Analysts urge Canada to focus on boosting the economy

Updated 06 July 2020

Analysts urge Canada to focus on boosting the economy

  • Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time

TORONTO: Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian Finance Minister Bill Morneau will deliver a “fiscal snapshot” on Wednesday that will outline the current balance sheet and may give an idea of the money the government is setting aside for the future.

As the economy recovers, some fiscal support measures, which are expected to boost the budget deficit sharply, could be wound down and replaced by incentives meant to get people back to work and measures to boost economic growth, economists said.

“The only solution to these large deficits is growth, so we need a transition to a pro-growth agenda,” said Craig Wright, chief economist at Royal Bank of Canada. The IMF expects Canada’s economy to contract by 8.4 percent this year. Ottawa is already rolling out more than C$150 billion in direct economic aid, including payments to workers impacted by COVID-19.

Further stimulus measures could include a green growth strategy, as well as spending on infrastructure, including smart infrastructure, economists said. Smart infrastructure makes use of digital technology.

“We have to make sure that government spending is calibrated to the economy of the future rather than the economy of the past,” Wright said.

Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time, citing the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by COVID-19 shutdowns.

Standard & Poor’s, Moody’s and DBRS still give Canadian debt the highest rating. At DBRS, Michael Heydt, the lead sovereign analyst on Canada, says his concern is about potential structural damage to the economy if the slowdown lingers too long.

Fiscal policymakers “need to be confident that there is a recovery underway before they start talking about (debt) consolidation,” Heydt said.

Fitch expects Canada’s total government debt will rise to 115.1 percent of GDP in 2020 from 88.3 percent in 2019.

Royce Mendes, a senior economist at CIBC Capital Markets, said the economy still needs more support.

“Turning too quickly toward austerity would be a clear mistake,” he said.