France Submits Details on Car Aid Plan to European Union

France Submits Details on Car Aid Plan to European Union


Feb. 18 (Bloomberg) -- The French government provided details about its 6 billion-euro ($7.6 billion) plan to aid carmakers to European Union regulators, who have threatened to outlaw the proposals as a violation of rules.

France submitted documents to the European Commission late last night, Jonathan Todd, a commission spokesman, said in an e- mail today.

Under the French program, PSA Peugeot Citroen and Renault SA, the country’s two largest carmakers, will each get 3 billion euros in government loans over five years after promising to preserve jobs and production in the country.

The Brussels-based commission, which checks whether government aid hinders competition, is concerned that the French plan may break EU rules outlawing restrictions on where companies can set up businesses in the 27-nation bloc. Politicians in Sweden, Slovakia and the Czech Republic have accused France of unlawfully sheltering companies.

EU Competition Commissioner Neelie Kroes said last week that the conditional aid is “the clearest example of protectionist rhetoric.”

BLOOMBERG