Volkswagen has warned that compensation packages for European motorists who bought cars fitted with devices to cheap emission tests will not receive payouts on the scale of the €15 billion package that the company has agreed to in the United States.

Volkswagen chief executive Mattihas Muller told German newspaper, Die Welt a similar settlement would be inappropriate and unaffordable.

Europe’s Industry Commissioner Elzbieta Bienkowska last week called on Volkswagen to also compensate European owners of its diesel-powered cars, saying it would be unfair for them to be treated differently from US customers just because of a different legal system.

"We have a different situation here (in Europe)," Matthias Mueller was quoted as saying by Welt am Sonntag. Mueller also said while VW was on a solid financial footing, replicating the US deal in Europe would be tough for VW to cope with financially. "You don't have to be a mathematician to realise that compensation at arbitrarily high levels would overwhelm Volkswagen," he said.

Mueller said he had spoken to Bienkowska in Brussels this week about his views. "In the US the (emission) limits are stricter, which makes the fix more complicated. And taking part in the buyback is voluntary (for customers), which is not the case in Germany, for example," he said.

Because the US authorities want as many cars to be bought back as possible, VW also has to offer customers incentives, meaning the situation is not comparable, he added.

Legal action has begun in the Republic of Ireland over the scandal.

Liam Moloney, a solicitor acting for a number of Irish car owners affected, said the company should “enter into fair settlement talks to properly compensate consumers who are at a loss as a result of their actions”.

Reuters