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NINETY EIGHT REGENCY

UK, Belgium urge EU scrutiny of German Opel aid

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This article belongs to automotive news

UK, Belgium urge EU scrutiny of German Opel aid

SEPTEMBER 14, 2009 10:01 CET

UPDATED: SEPT. 14 15:21 CET

FRANKFURT/LONDON (Reuters) -- Britain and Belgium on Monday urged the European Commission to ensure the takeover of Opel did not favor German workers because of 4.5 billion euros ($6.55 billion) in promised aid from Berlin.

Both countries are suspicious of the deal with Canadian supplier Magna International Inc. and its Russian allies, under which all four German plants stay open while Opel's Belgian plant in Antwerp and one of two Vauxhall sites in Britain could close.

"I think it is important to say that the (European) Commission should not accept anything that looks like a political fix or any linkage between aid and retention of jobs in any specific plant or country," British Business Secretary Peter Mandelson told BBC radio.

General Motors Co. agreed last week to sell a 55 percent stake in Opel to Magna and Russia's state lender Sberbank, bowing to Berlin's wishes.

Germany hopes Magna's expertise will preserve as many jobs as possible in Germany, where half of Opel's workforce is based.

Antwerp has chance

Kris Peeters, the premier of the Belgian region of Flanders that is home to Opel's Antwerp plant, held talks on Monday with EU Industry Commissioner Guenter Verheugen.

Peeters said he and Verheugen agreed that commercial and economic, not political, factors were paramount in deciding which plants should survive.

"We are convinced Antwerp has a fair chance. Antwerp has a better chance than certain German plants," he told reporters, adding Flanders would consider filing a complaint with the Commission.

Verheugen and Competition Commissioner Neelie Kroes were also due to address a European Parliament debate on Opel aid called by former Belgian Prime Minister Guy Verhofstadt.

The Commission said it expects to receive details on the state aid from Germany in the next couple of weeks and said no subsidies could be given before it was satisfied they complied with state aid and internal market rules.

Chancellor Angela Merkel's government, worried about potential job losses before an election on Sept. 27, had openly backed Magna over financial investor RHJ International.

Germany ringfenced and propped up Opel with a 1.5 billion euro bridge loan in May to ensure it did not get swept into GM's brief bankruptcy proceedings.

The federal and state governments are ready to provide billions more in aid once the Magna deal closes by the end of November. It will then ask other European countries such as Britain, Belgium and Spain to share the costs.

Tuesday meeting

Germany plans to host a meeting of representatives from countries with Opel plants on Tuesday to discuss their possible financial contributions.

Flanders has pledged up to 500 million euros in aid.

An Opel trustee with reservations about the project was quoted as saying that hundreds of millions of euros in German state aid planned for Opel was earmarked for operations in Russia.

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They=GM should have waited till the German elections were over before the dicidion to sell was made :twocents:

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They=GM should have waited till the German elections were over before the dicidion to sell was made :twocents:

Perhaps this approach suits GM's interests better...

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Perhaps this approach suits GM's interests better...

Perhaps but they sure took their time & were worried of the Russians interests. I think they wanted Opel back & thought that the other offer was the path to reunion.

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Perhaps but they sure took their time & were worried of the Russians interests. I think they wanted Opel back & thought that the other offer was the path to reunion.

And (funny thing!) now the German unions, the same that wanted to cut loose of GM, want to have veto power over relocation of production. Because, IMO, they're afraid Magna will relocate Opel prodution to Russia.

The stage is set.

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