The shape of the European Commission’s potential rescue package for the European Union automobile industry has become much clearer: a E40 billion ($52 billion) soft loan via the European Investment Bank.
The potential loan was revealed by EU Industry Commissioner Günter Verheugen after a meeting with European auto sector executives, including officials from France’sPeugeot Citroen and Germany’s AG, under the umbrella of the EU’s CARS 21 reform initiative.
Verheugen says the money would be tied to retooling required to reduce the carbon emissions of EU vehicles.
“We have to make sure the extra effort they must make to have lower emissions is not settled through subsidies, but that it should be possible for them to have proper access to credit,” Verheugen says. “Loan subsidies could be provided via the European Investment Bank.”
By focusing on the environment, and also using the EIB for a low-interest loan, the Commission should be able to avoid any legal challenges claiming the EU is unfairly favoring the auto industry and breaking its own state-aid anti-subsidy rules.
The initiative has been welcomed by the ACEA, the European automobile manufacturers’ association.
“A low-interest loans package would help secure a sustainable market for current and newly developed fuel-efficient technologies,” the group says in a statement.