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EU wants total review of Opel rescue plan

AFP · 15 Jun 2009, 08:32

Published: 15 Jun 2009 08:32 GMT+02:00

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"The European Commission cannot allow such a plan to pass automatically, it must examine it from top to bottom," said the German commissioner in Monday's edition of Die Welt.

He said the plan must "truly offer assurances that the business will survive and will be competitive for a length of time."

Opel was bailed out late last month by a €1.5-billion ($2.1-billion) loan from Berlin as well as a promised initial investment of €700 million from Canadian auto parts maker Magna, which won the bidding war to take over the struggling firm.

Magna and General Motors, Opel's parent company which has been bailed out by the US government, have haggled over finalising their preliminary agreement. Under the proposed deal, GM would keep 35 percent of the company and Opel's workers would retain 10 percent. Magna would hold 20 percent, and Russia's state bank Sberbank, which has joined forces in the deal with troubled Russian car maker GAZ, would have 35 percent.

"So far no investor in the world has come forward to continue the activities of GM Europe without public aid, that (shows) the risk for the business is very high," Verheugen said.

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"The only ones who incur a relatively low risk by participating in General Motors Europe are the Russians," he added. "They are going to gain access to more modern technologies and can then build up their own automobile industry, suitable for exports."

Verheugen admitted that in the end "the key decisions about the business could not be taken without the approval of the governments in Moscow and Washington."

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