Wednesday

22nd Nov 2017

Investigation

EU probe into VW loan remains opaque

  • Volkswagen equipped millions of diesel engines with defeat devices (Photo: Volkswagen)

There is a lot of uncertainty surrounding the conclusion of an anti-fraud investigation into a €400-million European Investment Bank (EIB) loan provided to Volkswagen, which cheated on EU vehicle emission tests.

The EU's anti-fraud office, Olaf, finished its investigation in late July, but does not want to comment on the record about what it found.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Last January, EIB chief Hoyer said the bank had 'not found any indication' its loans to Volkswagen had been misused. Seven months later, he said the EIB never concluded its own probe (Photo: EIB)

When this website asked the Olaf press office whether it would publish the report, it was told to ask the EIB. The EIB then referred back to Olaf.

“Olaf has produced the report. Hence it is Olaf’s decision to publish or not publish the report,” an EIB official told EUobserver on Thursday (24 August).

The EIB did not want to comment on the record, but made the official available to respond anonymously.

On 31 July, news website Politico reported that Olaf had concluded that Volkswagen acquired the EIB loan through “fraud” and “deception.”

Olaf's press office did not want to go on the record to confirm or deny that press report, based on anonymous Olaf sources. However, it did provide a statement that hinted at misconduct.

“Olaf sent its final report and a judicial recommendation to the German national authorities, namely the public prosecutor’s office in Braunschweig, Germany,” it said.

Braunschweig prosecutors are leading the investigation into Volkswagen's suspected emissions fraud.

Disappointed

The EIB has confirmed publicly that it has been "misled" by the German carmaker.

EIB president Werner Hoyer gave a statement on 1 August, revealing one of the report's conclusions.

“We are very disappointed at what is asserted by the Olaf investigation, namely that the EIB was misled by VW about the use of the defeat device,” said Hoyer.

Volkswagen used defeat devices in millions of diesel cars to pass EU emissions tests. According to the Politico article, the car company used the EIB loan to finance work on the EA 189 diesel engine, which contained a defeat device.

“We still cannot exclude that one of our loans … was linked to emission control technologies developed at the time the defeat software was designed and used,” said Hoyer.

No indication of fraud?

That was a very different approach compared to what Hoyer said last January, at the EIB's annual press conference.

“We have not found any indication that our loans might have been used for fraudulent purposes, which are the source of the problem for Volkswagen” Hoyer told journalists on 24 January.

“As far as we know - and we have investigated very, very thoroughly - our loans to Volkswagen have not been abused,” he added.

In August, however, Hoyer said “the EIB had not concluded its own investigation of the case”.

The bank chief has now said that the internal probe was put on hold “to avoid duplication” with Olaf's inquiry, something that he did not mention in the January press conference when he implied all investigating had been concluded.

Anti-fraud policy

The case raises questions about the bank's implementation of its anti-fraud policy, something Olaf's press office highlighted.

“Olaf recommended that the European Investment Bank (EIB) take active steps in implementing their anti-fraud policy,” Olaf said.

That advice implies that the EIB had until now not implemented its anti-fraud policy, at least not to the fullest extent.

Hoyer, however, said that the EIB “needs no encouragement to apply the provisions of its anti-fraud policy wherever relevant”.

The anonymous EIB official said the bank is now discussing what can be learned from the VW case.

The Volkswagen loan had already been paid back. Taxpayer money is usually not involved because the EIB borrows from the open market, backed by member states' guarantees.

EIB silent on report into 'fraudulent' VW loan

European Investment Bank vice-president Taylor tells EUobserver the fraud investigation into a €400 million EIB loan to Volkswagen had 'considerable ramifications', but didn't want to explain why the report was kept secret.

VW diesel repairs could take until 2019

German car company has fixed 5.4 million of the 8.5 million European diesel cars that were equipped with emissions-cheating software. Some consumers have decided to shun Volkswagen Group forever.

Interview

Dieselgate disappointed car-loving commissioner

Industry commissioner Elzbieta Bienkowska often finds herself on opposite sides to the car industry, referring to diesel engines as the "technology of the past".

News in Brief

  1. December euro summit still on, Tusk confirms
  2. EU calls for end to Kenya election crisis
  3. Report: Israeli PM invited to meet EU ministers
  4. French banks close Le Pen accounts
  5. Commission relaxes rules on labelling free range eggs
  6. Commission issues €34m fine over car equipment cartel
  7. Estonian presidency 'delighted' with emissions trading vote
  8. Mladic found guilty of genocide and war crimes

Stakeholders' Highlights

  1. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  2. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  3. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  4. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition
  5. European Jewish CongressEJC to French President Macron: We Oppose All Contact With Far-Right & Far-Left
  6. EPSUWith EU Pillar of Social Rights in Place, Time Is Ticking for Commission to Deliver
  7. ILGA EuropeBan on LGBTI Events in Ankara Must Be Overturned
  8. Bio-Based IndustriesBio-Based Industries: European Growth is in Our Nature!
  9. Dialogue PlatformErdogan's Most Vulnerable Victims: Women and Children
  10. UNICEFEuropean Parliament Marks World Children's Day by Launching Dialogue With Children
  11. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  12. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure

Latest News

  1. Mali blames West for chaos in Libya
  2. Orban stokes up his voters with anti-Soros 'consultation'
  3. Commission warns Italy over high debt level
  4. Mladic found guilty for Bosnia genocide and war crimes
  5. Uber may face fines in EU for keeping data breach secret
  6. EU counter-propaganda 'harms' relations, Russia says
  7. The EU's half-hearted Ostpolitik
  8. Glyphosate: 1.3 million EU citizens call for ban