US undermining German economy to strengthen its own position – economist
Hickel is scathing in his attack on the US government for trying to hinder the growth of Germany’s economy for its own gains. Aside from the scandal revolving around Volkswagen last autumn, he also cited the TTIP free trade pact which he believes will have a negative impact on German economic growth.
Speaking to the Huffington Post, Hickel accused the US government of double standards regarding Volkswagen, admitting it manipulated emission levels in diesel engines, with Washington conveniently forgetting the fallout cause by the General Motors (GM) scandal with 124 deaths caused by a defective ignition switch.
The US auto manufacturer agreed to pay $900 million to end a US investigation into the defective switches. The deal meant GM agreed to accept criminally hiding the defect from regulators and in the process defrauding consumers.
The sum of $900 million was a paltry figure in relation to the compensation figures Volkswagen is preparing to shell out to compensate those affected after reaching a deal with the US authorities. Around 600,000 cars were affected in the US alone. The German carmaker says it will pay out $5,000 to each of its American-based customers as well as paying for any damage caused to the cars, the Die Welt newspaper reports.
Europe's biggest carmaker is making provisions for a double-digit billion-euro amount it will set aside to cover its emissions test cheating scandal. Arndt Ellinghorst, an analyst at market research firm Evercore ISI, told Reuters he believes the total costs of the scandal will reach about €30 billion ($33.8 billion).
“The US government authorities have shamelessly exploited the Volkswagen scandal in order to strengthen its own business position,” Hickel said. "Washington wants to promote its own industry at the expense of the German carmaker.”
The professor from the University of Bremen noted that the scandal involving Volkswagen was not the only instance of the US looking to gain economic benefits at the expense of Europe. Hickel said he believes that the US government is deliberately targeting the European and German economies in order to “strengthen its own domestic exporters.”
One of the instances he uses is the transatlantic trade deal (TTIP), which will result in large benefits for big US corporations, while it will decrease consumer protection rights on both sides of the Atlantic. Hickel also predicts that if TTIP is implemented, this will lead to annual growth of just 0.1 percent amongst European economies, while the figure for the US would be 2.2 percent.
"The middle class fear unfair competition by regulations benefiting the large corporations," Hickel mentioned.
However, it seems as though Germans are beginning to realize that TTIP will benefit Berlin. A recent survey by YouGov for the Bertelsmann Foundation, as cited by Reuters, showed that only 17 percent of Germans believe TTIP will be beneficial. Two years ago, this figure stood at 55 percent.
"Support for trade agreements is fading in a country that views itself as the global export champion," Aart de Geus, chairman and chief executive of the Bertelsmann Foundation told Reuters.
Hickel believes these revelations just confirm that Washington is still looking to target Western Europe and has learned little from the Snowden revelations, which showed that the National Security Agency (NSA) had been tapping Chancellor Angela Merkel’s personal phone calls.
It was also revealed Germany's BND intelligence agency spied on European politicians and companies for the NSA for over a decade. Among the companies spied upon were the European Aeronautic Defence and Space Company (EADS) and Eurocopter.