Goedkope leningen van Franse overheid voor auto's van Franse makelij (en)
EUOBSERVER / BRUSSELS - A commission spokesperson said Tuesday (3 February) that the French minister for industry, Luc Chatel, is to hold talks with competition commissioner Neelie Kroes i on Wednesday to discuss new support measures for the car industry that are likely to prove controversial.
The French government is preparing to provide low interest loans to French automobile manufacturers on condition that they buy specific volumes of automobile parts from local suppliers, according to an article in the Financial Times.
The move comes shortly after the EU ambassador to the United States, John Bruton, criticised a "Buy American" article contained in the €700 billion ($900 billion) stimulus package currently being debated by the US Senate.
"President Obama i has a major opportunity to give leadership to the world ... that few American presidents have had for generations," Mr Bruton told Reuters in an interview.
"If the first major piece of legislation that he signs is one that is seen as damaging the economic interests of other countries in a way that is unnecessary and wasteful, then his capacity to give the sort of leadership the world needs at this time is considerably and unnecessarily reduced."
European steel-makers have asked the commission to file a complaint with the WTO if the "Buy American" provision limiting foreign steel company involvement in infrastructure projects funded by the stimulus package is signed into law.
The commission competition spokesperson also said on Tuesday that a €500 million French aid package to be spent over two years on developing green technology in the automobile sector had been approved by the commission.
France is not alone in seeking measures to support its ailing car industry.
Last week, UK business secretary Peter Mandelson i launched a €2.6 billion (£2.3 billion) plan to act as a lifeline for car companies operating within the UK. The funds are tied to the development of low-carbon initiatives.
However, the "Buy French" proposal is likely to cause concern in London, where policymakers insist member state support plans for particular sectors should not give rise to new protectionist barriers.
Speaking before a meeting to discuss car support measures two weeks ago, Mr Mandelson said: "It is important that the EU member states offer real assistance to hard-pressed companies in ways that do not distort competition in Europe's single market."
Some economists argue that the wave of protectionist measures following the Wall Street Crash in 1929 exacerbated the economic downturn and contributed to a global depression in the 1930s.
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