EU:GERMANY AND France ended months of disagreement yesterday with a proposal for the phased introduction of EU regulations to reduce carbon dioxide levels in car emissions.
Berlin opposed European Commission plans to reduce CO2 emission limits by 2012 to 120g/km across a manufacturer's range, claiming it would discriminate against German luxury brands like BMW and Porsche.
France, producer of mostly smaller cars, supported the move.
The compromise agreed by chancellor Angela Merkel and president Nicolas Sarkozy suggests that the 120g/km limit should apply to all new car models produced from 2012. A "substantial" phasing-in period would apply for existing models.
"I am very happy to say that we both support the EU goal of 120 grammes per kilometre on all new EU cars by 2012," said Dr Merkel after regular bilateral talks with Mr Sarkozy, held yesterday in Bavaria.
"The details will still have to be worked out by our environmental ministers but we believe that this is a giant step ahead."
Dr Merkel said she was optimistic that the European Commission and other member states of the EU would approve their deal. "We have proven once more that France and Germany can work together," she said.
From 2020, the two leaders suggested that a limit of 110g/km should apply.
Brussels is calling for 95g/km.
The compromise was given a cautious welcome by the German car lobby yesterday.
"The suggestion is a considerable improvement on the commission proposal," said Matthias Wissman, head of Germany's automobile lobby.
"It's less bureaucratic and is more research-friendly."
Car makers had pressured the German government to push for the EU to take into account other green innovations in car design, such as roof solar panels, new tyre design or energy-saving air-conditioners.
German and French officials said they recognised the need to allow up to 8g/km leeway in CO2 emissions in lieu of new technology.
"I understand perfectly the interests of our German friends and the nearly identity-defining aspect of high quality car manufacture in Germany," said Mr Sarkozy.
Even with such technological innovations, it remains to be seen how German car manufacturers will meet the new EU limits.
Nevertheless, the deal gives Mr Sarkozy his first EU policy success, three weeks before the official start of the French presidency on July 1st.