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FRANKFURT (Thomson Financial) — Germany and France are still far from resolving their differences regarding the EU’s proposed rules on reducing car emissions, Handelsblatt said, citing government sources.

A meeting last Wednesday between German and French officials to find a compromise on car emission targets proposed by the European Commission showed the positions of the two countries are poles apart, the paper said.

As a result a scheduled meeting between German Environment

Minister Sigmar Gabriel and his French counterpart Jean-Louis Borloo had to be cancelled, it said, without saying when the meeting was to take place.

Germany has criticized the Commission’s proposals to impose heavy fines on carmakers that fail to meet emissions targets by 2012, arguing the measures unfairly burden the country’s car producers.

The proposed penalties would start in 2012 at 20 euros per gram of carbon dioxide over a target and increase to 95 euros in 2015.

Companies such as Daimler, BMW, Porsche and Audi — which make big cars that consume a huge amount of gasoline — have lobbied hard against the EU plans.

Makers of smaller cars, such as those in France, Italy, Spain and Romania, support the EU.

Handelsblatt said with the meeting of Gabriel and Borloo now cancelled, the goal to present a German-French compromise by early

June during a meeting of the EU environment ministers is unlikely to be met.

The plan was that a final agreement would then be signed during an EU summit meeting in mid-June, the report said.

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