Thursday

29th Sep 2022

Industry commissioner backs €40 billion car sector loans

  • Industry commissioner Verheugen backs aid to car manufacturers to help make the shift to green technology (Photo: europa.eu)

The European Commission has backed the idea of offering car manufacturers €40 billion in low-interest loans to ease the transition to greener technologies amidst the ongoing economic crisis.

After meeting with European auto sector executives, including France's Peugeot-Citroen and Germany's Daimler on Wednesday (29 October), industry commissioner Guenter Verheugen said he believed loans requested by the industry could be provided via the European Investment Bank to help the companies develop cars that meet EU carbon emissions targets.

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"We have to make sure the extra effort they must make to have lower emissions is not settled through subsidies but that it should be possible for them to have proper access to credit," Mr Verheugen told reporters at a press conference in Brussels after the meeting.

"Loan subsidies could be provided via the European Investent Bank," he said.

The commission cannot direct the EIB to offer the loans, but with the backing of Mr Verheugen, car companies believe that they can convince EU member states to support such a series of measures.

He said the money should be made available for research and development in the area of energy efficiency and lower fuel consumption of new vehicles.

"We are in a situation where it is getting harder for big European businesses to get credit," he added.

"It is not a question of hand-outs, it's a question of the European Investment Bank making available a low-interest credit programme."

Meanwhile, German Chancellor Angela Merkel yesterday announced plans to support the domestic car industry by lowering taxes on low-emission cars.

Ms Merkel underscored that moves to support manufacturers would aim to spur investment rather than operate as a government prop for the industry.

"It will be targeted, it will be courageous and above all it will be sustainable," she said during a meeting of the German import-export association, BGA, reports Deutsche Welle.

The move, expected to be approved by the cabinet next week, would be part of a broader package of measures to buttress the rapidly deflating German economy.

Environmental campaigners however are firmly against the growing consensus for public aid to car companies.

"Car manufacturers are crying wolf and presenting inflated costs for reducing their CO2 emissions, while utterly disregarding the significant benefits of more fuel efficient cars to consumers," said Franziska Achterberg, a Greenpeace campaigner in Brussels.

"Instead of responding to demands from the public for cleaner cars, carmakers want to continue to milk the taxpayer and are asking for more government subsidies."

Commanding heights

Separately, according to a poll by Germany's Stern magazine, the country's population is rapidly falling out of love with the free market and may be open to more such government intervention in the economy.

An overwhelming majority of respondents said they would support nationalisation of the commanding heights of the economy, including banks, energy companies and the transport sector.

Some 77 percent said the government should buy stakes in energy firms and 64 percent backed part-nationalisation of financial insitutions.

A further 60 percent wanted airline Lufthansa, Deutsche Post and railway Deutsche Bahn to either stay or come into the shelter of public ownership.

Additionally, between 40 and 45 percent approved of government taking over agriculture, the chemicals industry, pharmaceutical companies and telecommunications firms.

Analysis

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