€6 billion aid for car industry
Loans and guarantees will help car makers through “toughest time” in their history.
THE STATE has promised €5–6 billion to help the French car industry.
Prime Minister François Fillon made the promise at the “car industry estates general” which brought together key players from government and industry at Bercy, east Paris, yesterday.
The exact details of how the deal will be given to French car makers Renault and Citröen next month, along with a long-term plan for the industry, which is said to be facing the toughest time of its history.
The money will most likely come in the form of loans and guarantees.
The priorities for the new funds will be the day to day running of the businesses as well as providing loans to car buyers, said Industry Minister Luc Chatel.
The prime minister has asked Brussels to approve the aid package quickly. Car sales dropped 18% in December in Europe.
Nonetheless, the firms are being asked for some concessions in return, including not relocating production to other countries.
Further discussions are taking place over ways to modernise the industry and how government can help.
Carmakers have complained that the burden of social charges and taxes make it more expensive to produce cars in France compared to Eastern Europe.
Renault head Carlos Ghosn said the difference in cost amounted to €1,400 per car on average.
A €300 million modernisation fund has been set up, one third contributed by the state, as a separate venture to the short-term bail-out.
