European carmakers may get €40bn loan

The EU could offer Europe’s car industry up to €40bn to develop the next generation of cars, EU industry chief Günter Verheugen has revealed.

The German commission vice president for enterprise and industry told journalists, at a press conference on Wednesday, that he is in favour of a low-interest “soft” loan package for the automobile sector to be made available through the European Investment Bank (EIB).

Speaking after a high-level conference on the EU’s CARS 21 initiative, Verheugen said that the offer was being proposed to address concerns from industry about how to meet Europe’s ambitious targets on CO2 emissions while facing possible job losses due to the global credit crunch.

“We can’t make industry alone responsible for everything. There has to be a certain level of responsibility with the member states”.

Verheugen insisted that the offer was not an attempt to lessen the burden on car makers to reduce CO2 emissions from their vehicles.

“Nobody questions the targets that we already have. The only question is, how we can achieve those targets,” he said.

“The car industry isn’t calling for subsidies. There seems to be a public misunderstanding here,” he added.

However Franziska Achterberg, Greenpeace EU transport policy campaigner, said the offer of a loan meant that the CO2 reduction targets for cars would have less of an impact.  

“As long as carmakers duck their responsibility to reduce CO2 emissions, any loan given to them would mean subsidising climate change. The industry should stop blocking proposals for serious emissions reductions before a handout is even considered,” she said.

Meanwhile Christian Streiff, president of the board of directors of the European Automobile Manufacturers’ Association, said that tighter regulations meant that the current car industry would soon be unable to compete with other countries.

“The industry’s competitive advantage is being pushed to its limits,” he said.

In particular, Streiff said that the industry was facing further difficulties from EU proposals to impose penalties payments against car manufacturers for exceeding the CO2 targets.

“The level of penalties in terms of CO2 costs is just crazy,” he added.

However Brussels-based Green NGO Transport & Environment said in a statement that the car industry's fears over CO2 penalties were exaggerated.

"ACEA, the car industry lobby has also claimed today that the costs of CO2 reduction in the car industry will be €485 per tonne.  That calculation is deeply misleading".

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