EU court strikes down Germany’s car toll

Europe’s highest court on 18 June ruled against Germany's plan to charge motorists to use AutobahnsThe European Court of Justice agreed with a complaint filed by Austria that Germany’s plan to offer locals a tax cut equivalent to the cost of the levy would mean foreigners having to pick up the tab - which violates EU rules.

"The car toll is in this form therefore off the table unfortunately," German Transport Minister Andreas Scheuer, a Bavarian conservative, told reporters in Munich.

Germany is one of the few EU countries not to charge motorists for using highways, instead covering the upkeep of its Autobahns through taxes. But German motorists moan about foreigners using the network for free, especially in rural Bavaria, prompting the Christian Social Union, sister party to Chancellor Angela Merkel’s Christian Democratic Union, to draw up plans for a charging scheme.

Merkel was against the idea, saying ahead of the 2013 federal election that "with me, there will be no toll." But the CSU, which has held the transport ministry for the last three government terms, got the policy into the coalition government deal by pledging not to levy extra costs on Germans.

On 18 June, Merkel said during a press conference in Berlin that the government will accept the court decision and the transport ministry will need to decide how to proceed.

The system was due to come into force in October 2020. German-registered cars would have been charged €130 a year, with the cost deducted from road taxes. Non-German drivers would have been able to buy vignettes for shorter periods, but wouldn't get a rebate.

However on 18 June, the ECJ said the plan would be “indirect discrimination on grounds of nationality" and breach "the principles of the free movement of goods and of the freedom to provide services.”

The court decision, which goes against an earlier CJEU advocate general opinion, is embarrassing for Brussels. European Commission President Jean-Claude Juncker agreed to support the plan in 2016 in return for minor tweaks, instructing Commissioner for Transport Violeta Bulc to publicly back Berlin. The deal included connecting the tax rebate to a reward scheme for cleaner cars, and lowering the cost of short-term vignettes for those driving through Germany. As a result, the Commission dropped its case against Germany.

Some of Germany's neighbours such as the Czech Republic, which wants Berlin to back a high-speed rail link to Prague, and Denmark, which was banking on German approval for a multibillion-euro rail and road undersea tunnel, toned down their opposition. Yet Austria kept up the heat, backed by the Netherlands, launching one of the bloc's few country-on-country CJEU cases.

"I'm pleased our resistance has been successful,” said Cora van Nieuwenhuizen, the Dutch infrastructure minister. A government-commissioned study said in 2017 that Germany's plan would cost Dutch drivers up to €100m a year and hamper cross-border business.

The decision comes as the EU is trying to push through new laws that would nudge countries to introduce road charging systems and put the cost of maintaining infrastructure on those who use it.

Brussels reckons a distance-based system that charges drivers per kilometer is better than Germany's time-based approach. Yet Scheuer and his team don't want to rile people commuting into cities from Bavaria's small alpine villages by opting for the distance system.

"The Commission considers that road charging is an efficient way of making drivers rather than society at large pay for use of infrastructure and, where relevant, the pollution caused," a Commission spokesperson said in response to the ruling.

But for now, the tolling plan — dubbed Maut in Berlin — is dead. "The verdict is surprising for us," said Scheuer in Munich. "This is not a nice day for infrastructure financing in Germany."