Nicolas Sarkozy today announced a €6.5bn (£5.6bn) government loan for the struggling French car industry, on condition that no French sites close and bosses' bonuses are scrapped.
France's car industry, which directly or indirectly employs 10% of the active population, has been badly hit by the financial crisis, and has had to reduce production and cut shifts, with temporary lay-offs.
The latest government package takes the form of a five-year loan at a preferential rate. A total of €3bn each will go to the two biggest carmakers, Renault, in which the state has a 15% stake, and the family-owned PSA Peugeot-Citroen. It means that
every industrial decision taken by the companies for the next five years will be examined by the government. A further €500m will go to Renault Trucks.
Sarkozy said last week it was "completely normal" that aid would come with strings attached. More than half of French-brand cars are now produced outside France after a number of firms built or bought factories abroad.
Sarkozy irritated the Czech Republic, which holds the rotating European Union presidency, by saying in a TV interview last week: "If we give money to automobile industries to rebuild themselves, it's not in order to learn that a new factory is going to leave for the Czech Republic or elsewhere." The Czech Prime Minister, Mirek Topolanek, today called the comment "unbelievable" and said it threatened the Czech ratification of the Lisbon treaty.
The government's car industry loan will be targeted towards developing green cars.
The French president applauded the carmakers' promise to do everything possible to prevent job cuts, saying he felt reassured that "an acute but temporary crisis would not destroy part of our industrial base and automobile know-how".
Peugeot and Renault are due to report full-year results this week. Both have reported a slump in full-year unit sales and cut profitability targets.
Source:
http://www.guardian.co.uk |
