Thursday

28th May 2020

EU investment bank pauses VW lending

  • Volkswagen was 'a long-term partner of the bank for many many years' (Photo: Frank Kehren)

The European Investment Bank (EIB) is not lending any new money to Volkswagen “for the time being” while the German auto manufacturer is being investigated for its use of defeat devices in emissions tests.

“In order to be on the safe side, and also to preserve the interest of the bank and that means also the interest of our shareholders, we have decided to put on hold any new loans to Volkswagen for the time being,” said EIB president Werner Hoyer Thursday (14 January) at a press conference in Brussels.

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  • Hoyer: "Astonished, disappointed and we are now concerned" (Photo: Council of European Union)

He called the German company “a long-term partner of the bank for many many years”. The EU's bank has invested in various research and development projects. In October it said it had around €1.8 billion in outstanding loans to VW.

One of those loans may be involved in the recent scandal, in which Volkswagen installed illegal software that allowed cars to come out of tests as much cleaner than they actually were.

“Whilst our review continues, based on our findings, so far we cannot exclude that there may be a link with a part of a €400 million EIB loan to Volkswagen signed in 2009 – that's Volkswagen Antrieb RDI – and the investigated activities,” said Hoyer.

“It still needs to be established whether any part of the loan was misused in that way. The loan was repaid by Volkswagen in full, according to schedule, in 2014,” the bank's president added.

He said that according to current information available to the bank “no other EIB operation either repaid or outstanding has a link to the defeat software in any way”.

“We were astonished, disappointed and we are now concerned about the allegations, including indications by senior company executives, of improper and possibly fraudulent behaviour by Volkswagen,” added Hoyer.

He said the ban on Volkswagen loans is based on “information, findings and recommendations emerging from our own review and from ongoing judicial investigations” and that the bank will review its assessment “on a regular basis”.

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