New Delhi, Oct. 9 -- The cartoon that accompanied the newspaper analysis of an almost 400-page report last month on the European Union's economic challenges seemed almost too harsh. It featured a broken-down Volkswagen (VW) vintage van, hoisted upon bricks for repairs while a giant US container truck roared past it.

VW is a microcosm of the EU's problems. Its last CEO left two years ago after his changes were blocked by powerful unions. VW's governance structure gives considerable clout to unions and is further complicated by the fact that the large German provincial government of Lower Saxony owns a fifth of the company and opposes plant closures that are urgent and necessary.

As The Economist notes, in its largest market, China, VW sa...