Wednesday, February 11, 2009

French Auto Bail-Out

France says it preserves jobs, not breaking EU rules

REUTERS — President Nicolas Sarkozy said on Wednesday he wanted to preserve French jobs during the economic downturn and denied that a rescue package for France's struggling carmakers broke EU state aid rules.
France was hit by a hail of criticism from EU allies over a 6 billion euro ($7.8 billion) state loan offered to Renault (RENA.PA) and PSA Peugeot-Citroen (PEUP.PA) earlier this week in return for an unwritten pledge not to close sites in France.
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France to loan €7.5 billion to auto industry

International Herald Tribune French auto makers Renault SA and PSA Peugeot-Citroen on Monday won a government rescue package which includes €7.5 billion ($9.8 billion) in low-interest loans by promising not to lay anyone off this year or close factories.
The government is offering Peugeot-Citroen and Renault a five-year direct loan of €3 billion each at an interest rate of 6 percent — well below market rates — to help finance investment in producing low-polluting vehicles.
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Sarkozy’s Go-It-Alone Aid Plan Defies EU Rules, Risks Reprisals

Bloomberg PRESS First he told smaller countries to take a back seat in crafting the European Union’s response to the economic crisis. Then he rapped Germany for spending too little and the U.K. for spending too much.
Now French President Nicolas Sarkozy is discarding any pretense of European solidarity, clashing with EU authorities who object to his plan to lend 6 billion euros ($7.8 billion) to carmakers Renault SA and PSA Peugeot Citroen as long as they agree not to close French plants or fire French workers.
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