Merkel Says Diesel Needed as Bridge Technology to Electric Cars

(Bloomberg) -- Chancellor Angela Merkel renewed her pledge to avoid diesel driving bans, arguing the technology will be needed for decades to come to reduce carbon dioxide emissions as automakers develop electric vehicles.

“This doesn’t mean we don’t have to address unforgivable mistakes – we can’t go back to the regular agenda,” Merkel said in a speech to the German lower house of parliament on Tuesday. “But that also doesn’t mean that we have to rob the whole industry of its future.”

Merkel called on the country’s auto industry -- which employs 800,000 people in Germany -- to invest in new technologies and clean up the diesel engines currently in use. The chancellor met state and municipal leaders on Monday, pledging to double a federal clean-air fund to 1 billion euros ($1.2 billion).

During her speech, Merkel, who’s running for a fourth term in Germany’s Sept. 24 election, rolled off a list of accomplishments, including economic growth and record low unemployment. Merkel later on Tuesday will participate in a forum hosted by German newspaper editors, while her main challenger, Social Democrat Martin Schulz, will answer questions during an online discussion.

“Today we’re an engine of growth; we’re the country with the highest employment that we’ve ever had,” Merkel said in her speech. “We’ve earned recognition for this.”