Brussels - The European Union's top industry official threw his weight Wednesday behind a call to give the bloc's carmakers cheap loans worth up to 40 billion euros (51 billion dollars) to develop eco-friendly cars through the financial crisis. "We are in a situation where it is getting harder for big European businesses to get credit. We must make sure the higher costs they face to develop climate-friendly cars should also be financed," EU Industry Commissioner Guenter Verheugen said after talks in Brussels with European automotive industry representatives.
"It is not a question of hand-outs, it's a question of the European Investment Bank making available a low-interest credit programme," he said.
Verheugen rejected a direct comparison with a 25-billion-dollar bail-out package from the United States government to struggling US firms, saying that EU car makers "do not want subsidies" and that the figure had "nothing to do" with the US programme.
The commissioner was speaking in response to an October 6 plea from the EU's biggest carmakers for 40 billion euros' worth of support through the current financial crisis.
Credit problems, falling orders and strict EU rules on cutting greenhouse-gas emissions are "reason why we can say today that the industry's competitive strength is being pushed to the limit," Christian Streiff, head of EU carmakers' association ACEA, said.
"In today's difficult operating environment ... the European automotive industry more than ever requires a stable and predictable policy framework to ensure competitiveness and employment," an ACEA press release said.
Wednesday's meeting came amidst grim sales figures for global carmakers, with US-based General Motors reporting a 6-per-cent fall in sales in the first nine months of 2008 and Streiff saying that sales of European cars had fallen 10 per cent in the third quarter.
And it comes as EU member states are arguing over a legislative proposal aimed at forcing car manufacturers to produce less environmentally damaging cars.
France, Germany and Italy, in particular, oppose the proposal, saying that it would make European carmakers uncompetitive.
Verheugen questioned the logic of "threatening an industry sector with high fines and at the same time giving it a financial leg up."
But environmental groups reacted angrily to his call for EIB credit, with Greenpeace accusing the car industry of "asking taxpayers to foot the bill for its irresponsibility and inaction, while continuing to churn out inefficient cars."
The carmakers' concerns "utterly disregard the significant benefits of more fuel-efficient cars to consumers ... Comparing the cost of (emissions) reductions between sectors that are not competing with each other is ridiculous," the Greenpeace statement said.
Verheugen also called for a system of rewarding EU citizens for scrapping their old cars in a climate-friendly way, and for measures to encourage citizens to buy new, climate-friendly vehicles.
