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28th May 2022

Sarkozy wants new EU state aid rules for car makers

  • France pledged €400 million over the next four years to support the development of more eco-friendly cars (Photo: EUobserver)

French President Nicolas Sarkozy is to propose a revision of EU state aid rules to encourage car makers to produce greener cars, as well as an EU aid plan which would allow European car producers to get loans at preferential rates.

Mr Sarkozy, also the current EU chair-in-office, said while attending the World Automobile Fair in Paris on Thursday (9 October) that the EU needs looser state aid rules in order to reach its own goals in the field of its climate and energy package, namely to cut greenhouse gas emissions and to boost the use of renewable energy by 20 percent by the year 2020.

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He added that the US is already offering state aid to its car manufacturers, referring to a vote by the US Congress last week to give cheap loans to Ford, General Motors and Chrysler to help them adapt to new emissions rules.

"The US Treasury is preparing to grant $25 million in long-term loans at unbeatable rates to US car makers for them to renovate their plants that are more than 20 years old," the French president said.

"I don't want us [Europe] to be living in a framework that doesn't allow us to help our own car makers undertake a major technological shift … I think we are naïve and I especially think that has lasted long enough," he added, French television channel France 2 reports.

Consequently, Mr Sarkozy will propose "to the European Commission and to our European partners a revision of the common framework on state aid ... so that it can be harmonised with the goals we are pursuing in the context of the climate-energy package."

The French leader's statements come days after the European car makers association ACEA called for €40 billion in aid from the EU to help them develop greener technologies.

They notably demanded low-interest loans from the EU "to help secure a sustainable market for current and newly developed fuel-efficient technologies," and called for incentives to "scrap vehicles of over eight years old, during a period of 36 months, to accelerate fleet renewal."

Separately, Mr Sarkozy also announced a French plan to spend €400 million over the next four years to support the development of more eco-friendly cars.

The money will be used "exclusively" to finance the research and development of "carbon-free cars, that is vehicles with the least possible emission of carbon dioxide, whether electric cars or hybrids," the president said, according to Deutsche Welle.

Meanwhile, French car manufacturers Renault and Peugeot-Citroen separately signed deals with France's largely state-controlled energy company EDF aiming to favour the development of electric cars and their commercialization in France by 2011.

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