The European Commission has given Germany a legal final warning that if it does not liberalise its Volkswagen liberalisation law it will probably ask the European Court of Justice (ECJ) to impose massive daily recurring fines of Euro 1,000s.

In a ‘reasoned opinion’ note, Brussels argues that by allowing special rights to control VW for the regional government of Lower Saxony and potentially itself, the German government has breached European Union (EU) treaty commitments on the free movement of capital between member states.

“Germany had failed to fulfil its obligations,” declared the Commission.

Because Berlin has effectively ignored a previous ECJ ruling on the matter delivered last October, the Commission is now preparing to ask its judges to fine Germany every day until it complies. Its government has two months to say how it will obey the ruling before Brussels can act.