VW 'will weather crisis'

Leading German figures from politics and industry on Sunday downplayed the effect the emissions-cheating scandal at Volkswagen would have on Germany's economy in the long term.

The head of the European Parliament, German Social Democrat Martin Schulz, told a newspaper group that not just the German economy, but the company itself would recover, although he had hard words to say about VW's behavior.

"It's a heavy blow for the German economy as a whole," Schulz was quoted by the group as saying.

"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.

He added, however, that this recovery was dependent on what steps were taken to remedy the effects of the scandal.

"Whether Volkswagen, and whether Germany regains the trust that has been lost will also be decided by how the scandal is resolved," he said, calling for those responsible to be quickly brought to justice.

'Surmountable' scandal

Chancellor Angela Merkel also acknowledged the magnitude of the scandal, but said it would not cause lasting damage to Germany's business reputation.

"It is, of course, a dramatic event that is not good," she told public service radio station Deutschlandfunk in an interview broadcast on Sunday.

"But I think the reputation of German industry, the confidence in the German economy, is not so shaken that we are no longer considered a good place to do business."

The company's incoming chairman, Hans Dieter Poetsch, was also quoted by newspaper "Welt am Sonntag" as saying that although the scandal threatened VW's viability, it was "surmountable."

Sky-high fines

The carmaker has set aside 6.5 billion euros ($7.5 billion) to help cover the costs of the scandal, which unfolded after US authorities discovered that many VW diesel vehicles had been fitted with illegal software that enabled cheating on emissions tests, giving much better results than under road conditions.

However, some analysts think the final bill could be much higher, with VW admitting that up to 11 million diesel vehicles have been equipped with the software and will need to be refitted.

The company is also likely to face massive fines in the United States for contravening its emissions laws, and several other countries and international customers have announced that they are looking into taking legal action as well.

'Not a victimless crime'

Environmental engineers and scientists commissioned by the Associated Press to study the effects of VW's cheating on human health and the environment have meanwhile concluded that pollution produced by VW diesel vehicles in the US might have killed between five and 20 people annually in recent years.

They said the death toll in Europe could be much higher, going into the hundreds annually, owing to the larger number of VW diesels sold, but cautioned that American computer models could not be easily translated to the more densely populated Europe.

The VW vehicles that passed emissions tests only with help the so-called "defeat device" belched out between 10 to 40 times more nitrogen oxides than allowed under US law, environmental authorities say.

tj/rc (AP, AFP, Reuters)