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NINETY EIGHT REGENCY

GM can forget past pledges of Opel aid, economy minister says

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GM can forget past pledges of Opel aid, economy minister says

NOVEMBER 16, 2009 11:16 CET

FRANKFURT (Reuters) -- Previous German pledges to provide state aid to carmaker Opel no longer apply now that General Motors Co. has said it can restructure its European arm alone, German Economy Minister Rainer Bruederle said.

"GM Chairman (Ed) Whitacre has said that his company can handle Opel, so this means that agreements and pledges that were based on other concepts are moot," Bruederle told reporters on the sidelines of a financial industry conference on Monday.

“Opel has the same right as any other German company to apply for state aid. We have a duty to examine this thoroughly. The outcome is open and there is no entitlement to have it approved,” he added.

Senior members of Chancellor Angela Merkel's cabinet have sent conflicting signals over whether the government should provide aid to Opel. Bruederle, a member of the pro-business Free Democrats (FDP), has taken the hardest line.

Finance Minister Wolfgang Schaeuble, a member of Merkel's Christian Democrats (CDU), told the weekly German magazine WirtschaftsWoche that the government could not refuse to provide aid now that GM had decided to hold onto Opel.

Berlin had pledged to contribute 4.5 billion euros in financing as part of a takeover of Opel by Canadian auto parts supplier Magna International Inc. GM reversed course earlier this month and decided it would rather keep Opel than sell a majority stake in it to Magna and its Russian partner, Sberbank.

"We simply can't say that for Magna we would have done all we could because we feel a responsibility toward the people and the plants, but then turn around and rule that out for another owner," Schaeuble said.

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