Measures to support the car industry were the focus of attention at a meeting in Brussels today between European Commissioner for Competition Neelie Kroes and French Industry Minister Luc Chatel.
Commissioner Kroes underlined that the Commission is favourable to measures to support demand for cars, like scrapping schemes that restore consumer confidence and give incentives for the elimination of old and most polluting cars. The Commission is also in favour of social measures for workers, such as temporary lay off schemes available to all industrial sectors that will help workers to cushion the effect of the crisis.
A large number of other measures can be adopted under “traditional” EU state aid rules, such as aid for research and innovation, as well as aid for environmental development.
The Commissioner also recalled that the Commission has recently taken new initiatives to help companies overcome the credit crunch. In particular, it has adopted a new state aid Temporary Framework to support access to finance in the context of the current crisis (see IP/08/1993 and MEMO/08/795), which includes measures which may significantly help the car sector, such as subsidised state guarantees and subsidised loans for green products (such as the French scheme approved by the Commission on 3rd February (see IP/09/205).
For his part, Minister Chatel gave a broad outline of the measures currently envisaged and indicated that details would be given to the Commission once they have been finalised. He underlined that the measures would not be protectionist and would respect France's obligations under Community law, including Single Market rules.
Commissioner Kroes welcomed this general statement and clearly indicated that any requirement – de jure or de facto – that aid beneficiaries had to invest only in France or had to buy their components from suppliers located in France "would be contrary to EU state aid and Single Market rules and would run the risk of a return to protectionism. Any aid granted in France to carmakers under existing aid schemes could not be regarded as compatible if subjected to such additional conditions".
Commissioner Kroes underlined that "It would not be in the interest of France, of French car makers or of any Member State to see a resurgence of protectionism in Europe. Raising barriers within Europe cannot be the way out of this crisis and we need to make that clear".
The Commissioner also underlined that, when considering whether to grant aid to the car industry, "we must not lose sight of the fact that overcapacity in the car sector existed already before the crisis, and that European car makers will need to restructure anyway if they want to compete in global markets".