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EU to review Germany's Opel loan
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09:49, June 03, 2009

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European Union anti-trust authorities will examine if Germany's 1.5 billion-euro (2.1 billion U.S. dollar) bridge loan to General Motors Corp.'s Opel unit is in line with an EU scheme to provide aid to companies in credit crisis.

The European Commission "will verify that the loan was fully inline with the scheme that we have already approved," Commission spokesman Jonathan Todd told reporters.

"We will do it as quickly as possible but it will be dependent on the extent of the information we receive," he said.

The Commission has contacted German authorities early on Tuesday, expecting details about the loan in the next few days, Todd said.

Under a German program, which received Commission approval in February, the government can grant aid in the form of guarantees for investment and working capital loans until the end of 2010. But only companies that were in difficulty after July 1, 2008, can benefit from the plan.

The German government, Opel's parent company General Motors (GM), Canadian auto parts maker Magna and the U.S. Ministry of Finance reached a deal in May to try to isolate the company from the fallout of GM, which announced bankruptancy on Monday.

The agreement includes three main points: the German government approves Magna's takeover of Opel, Opel will be put under the careof a trustee, and the German government will provide a 1.5-billion-euro (2.1 billion U.S. dollar) bridge loan to Opel.

Germany-based Opel was founded in 1863, and began making automobiles in 1899. During the Great Depression in 1929, Opel was acquired by GM.

GM Europe, which includes the Opel unit, employs a total of 55,000 people. Nearly half are employed in Germany at Opel plants in Bochum, Eisenach, Ruesselsheim and Kaiserslautern.

Magna, which has 70,000 employees at 326 plants in 25 countries and supplies components and systems to many of the world's leading carmakers, wants to buy Opel in order to enter the Russian market.

Source:Xinhua



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