Sustained EU criticism of French auto-industry plan

French president Nicolas Sarkozy has come under renewed attack for his €6bn bail-out of the country's ailing car industry.

Speaking at a hearing in  parliament on Monday, senior Czech MP Lubomir Zaoralek said such moves could be "disastrous" as Europe tries to tackle the credit crunch.

Zaoralek, deputy chairman of the Czech chamber of deputies, said, "It is very important that Europe finds a common approach to the current financial crisis.

"The French move was not entirely surprising given the current tendency towards nationalism but we need solidarity and a united, joint front - not isolationist policies."

His remarks follow news that Spain has become the latest EU country to stump up state aid to bail out the automotive industry.

On Friday, Madrid approved a €4bn package to boost its car sector.

Zaoralek was speaking at a joint hearing of MEPs and representatives from the Czech chambers of deputies and senate on the global financial meltdown.

Opening the hearing, parliament's president Hans-Gert Pöttering said it aimed to look at ways to encourage a return to growth and job creation.

The Czech chamber of deputies was represented by five MPs and the senate by three members.

Zaoralek's comments about the need to avoid protectionism were echoed by Miloslav Vlcek, speaker of the Czech chamber of deputies, or lower house.

"Europe needs to show solidarity at the present time and that will require patience," Vlcek said.

"Europe needs to kick-start demand and that means we need to show more coordination at EU level."

Another keynote speaker, Premysl Sobotka, president of the senate, said, "Questions are being asked as to whether there should  be subsidies and loans  but I would hope that we do not get bogged down in discussion about such things but rather look at the bigger picture."

German centre-right MEP Elmar Brok said, "To me, the French move looks like protectionism and it is correct that the commission investigates it.

"The French stimulus package must comply with internal market rules."

The commission last week warned that it will block the French loans if there are conditions obliging PSA Peugeot Citroen and Renault to preserve French jobs for French workers.

EU competition commissioner Neelie Kroes has been alarmed by widely reported conditions set by Paris linking the loans to a requirement that production remains in France.

Speaking in Brussels last week, French prime miniser François Fillon said the bail out was necessary to save jobs during the economic downturn.

Germany's BDI industrial federation last week said it was "highly alarmed" by the French loans.

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