Watchdog eyes Opel state help

The European Union’s competition watchdog vowed on Sunday to keep a tight rein on how state aid is given to ailing carmaker Opel, as the firm’s parent company prepares its pitch for help from countries including Germany.

• Exports top €1 trillion despite euro crisis (8 Feb 12)
• Merkel helps boost conservatives' popularity (8 Feb 12)
• GM threatens major job cuts at Opel (8 Feb 12)

EU competition commissioner Neelie Kroes told business daily Handelsblatt, in remarks published Sunday, that governments could not offer parent company General Motors help just to protect failing plants in their own countries.

“For us, location plays no role,” said Kroes. “The important thing for us is whether General Motors can prove that the European subsidiary can survive in the medium term without state help.”

After GM announced it was closing an Opel plant in Antwerp, Belgian politicians claimed other governments might have promised state aid in return for a promise from GM not to close plants in their countries – a breach of EU competition rules.

Germany faced similar accusations last year when it offered €4.5 billion in aid to Canadian carmaker Magna, which the German government hoped would buy Opel and keep open plants in this country that employ about 25,000 workers.

GM is demanding €2.7 billion in state aid for its European operations, the proposal for which is expected in the next few days.

Kroes also said that Brussels had so far received no applications from governments to give GM assistance, though she expected they would come soon. She also stressed she had not received any business plan for GM’s European plants.

But her impression was that “GM would not be engaged in Europe if the business had not future here.”

In any case, assistance would only be justifiable, she said, “if the money flows into the development of innovative, environmentally friendly products.”