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E.U. Experts Say Germany’s Planned Toll on Foreign Drivers Illegal

  • Why it matters

    Why it matters

    The European Union forbids discriminating against a member country, setting up legal hurdles to Germany’s plan to levy a toll on foreign motorists.

  • Facts

    Facts

    • The Transport Ministry estimates a toll on foreign drivers would raise €600 million ($802 million) annually.
    • Germany’s federal authorities maintain 50,000 kilometers (31,100 miles) of roads. States are responsible for 85,000 kilometers and cities and towns, 90,000.
    • The cost of building 1 kilometer of highway in Germany is €8.24 million ($11 million), according to World Highways magazine.
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    Audio

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A toll road to nowhere? Source: DPA

 

Constitutional law experts surveyed by Handelsblatt questioned the legality of Germany’s plans to levy a road toll only on foreign drivers and not on German citizens.

The proposal as it stands cannot be brought into accord with European law, according to Joachim Wieland, a constitutional specialist from Speyer. “A plan that only impinges on foreigners is inherently discriminatory,” he told Handelsblatt.

Right before parliament’s summer recess, German Transport Minister Alexander Dobrindt laid out the basics of the planned toll, which was widely criticized by his own conservatives and their coalition partner, the center-left Social Democratic Party. The organization responsible for providing independent scholarly research to parliament also expressed doubts that the plan follows European Union law.

Starting in 2016, Mr. Dobrindt wants an “infrastructure charge” not only on highways, but also on all roads. The coalition agreement, on the other hand, envisions a “toll on passenger vehicles… to require owners of passenger vehicles not registered in Germany to contribute to highway expenditures, without further burdening domestically registered vehicles.” It is intended to promote “the additional financing of the maintenance and extension of our highway system.” There is no mention of state and local roads, however.

“With legislation establishing a passenger-vehicle toll on all roadways, the federal government is appropriating quite a lot of jurisdiction for itself,” said Mr. Wieland. “But that does not allow it to collect fees on state and local roadways.”

Those authorities would have the right to those revenues, he said, and they would have to agree to such measures in the Bundesrat, the upper house of parliament representing Germany’s 16 states.

“In principle, the same standards must be applied to domestic and foreign car owners.”

Christoph Degenhart, University of Leipzig

Also, the amount of the fees could not be set arbitrarily, according to actual costs for infrastructure. Mr. Wieland said that for highways, the maximum would be €60 per year – a per capita road cost estimate that the Transport Ministry used in calculating tolls for trucks on German highways. Mr. Dobrindt’s concept, however, proposes €88 per year on average. The transport minister intends to set toll rates for domestic drivers not according to actual costs, but by the tax rates on motor vehicles, because he wants to offer German drivers tax relief by means of a deduction.

“In principle, the same standards must be applied to domestic and foreign car owners,” said Christoph Degenhart, a legal expert at the University of Leipzig.  Having German motorists pay according to the motor-vehicle tax and imposing a flat rate on foreign drivers “contradicts E.U. law,” he said.

It’s not clear how much money a toll on foreign vehicles would raise. Mr. Dobrindt expects about €600 million ($802 million) annually. But if the toll were collected on all roadways, then states and local governments could lay claim to their share of the money. The federal government operates 50,000 kilometers of roadways, the states about 85,000 and cities and towns about 90,000.

As an alternative, the Transport Ministry is considering charging a tax for entering Germany. But while such a tax is possible, it would not be easy to implement, according to Mr. Wieland. The administrative costs for collecting it from foreign motorists, he added, would be “considerable.” Mr. Degenhart also dismissed a possible tax for entering a country as “hardly conforming to E.U. law.”

Another problem for the proposed toll on foreign passenger vehicles:  There apparently is still no agreement on how to collect it. According to government sources, German Finance Minister Wolfgang Schäuble refuses to allow customs offices to be used in collecting tolls.

In the coming weeks, 11 federal ministries, as well as the chancellor’s office, are expected to express their reservations about the toll proposal. At the same time, negotiations are being conducted with the European Commission. After those talks, the Transport Ministry intends to submit a draft for legislation.

Daniel Delhaes is an editor at Handelsblatt. He can be reached at delhaes@handelsblatt.com

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