The Volkswagen scandal: a problem with standards in German business?

On 20 September, the US Environmental Protection Agency accused Volkswagen (VW) of having fabricated emission results since 2009 by installing special software in the diesel engines in its cars, which may affect 15 million vehicles. In fact, they emitted 40 times more harmful substances than admissible under US standards. The firm has admitted its guilt and may face a penalty of US$18 billion, the equivalent of one year’s profit. Within the next few days, Volkswagen’s shares fell by more than 40%, and those of other German companies by more than 6%. Chancellor Angela Merkel demanded an explanation from VW’s CEO, and the German Minister for Infrastructure appointed an investigative commission to deal with this matter. Representatives of the Green Party, referring to the federal government’s response to the interpellation submitted in parliament in July this year, stating that the emissions measurement system was defective, have accused the government of being aware of the dishonest practices of car companies. They are demanding that the CEO of Volkswagen be dismissed. The government can put strong pressure on a company given Lower Saxony holds a 20% of its shares. The governments of Australia, Canada, South Korea, Germany and Italy have ordered VW vehicles to be examined in use in their countries. The governments of the United Kingdom and Italy are insisting that the case be investigated by the European Commission.