Fresh challenge
September 14, 2009
Britain and Belgium on Monday urged the European Commission to ensure the takeover of carmaker Opel did not favor German workers because of 4.5 billion euros ($6.55 billion) in promised aid from Berlin. Both countries are suspicious of the deal with Canadian automotive supplier Magna and its Russian allies, under which all four German plants will stay open while Opel's Belgian plant and one of two Vauxhall sites in Britain could close.
"I think it is important to say that the (European) Commission should not accept anything that looks like a political fix or any linkage between aid and retention of jobs in any specific plant or country," British Business Secretary Peter Mandelson told the BBC.
The EU Commission denied media reports alleging it had information that could potentially derail German state support for Opel. German weekly der Spiegel had reported that the Commission was in possession of documents showing that the Opel plant in the Belgian city of Antwerp – which is threatened with closure – operates at greater efficiency than the facility in Bochum, Germany, which Opel's new owner Magna has promised to keep. EU law prohibits state guarantees for such a decision which – if true – would amount to economic nonsense.
Belgium demands special probe
In Belgium, anger is mounting at the German decision and the Flemish government has taken its argument to Brussels. Kris Peeters, first minister of Flanders said he wants the EU's executive commission to investigate whether German aid is in conflict with EU anti-competitive practices. He held talks with EU Industry Commissioner Guenter Verheugen on the issue on Monday. Peeters said he and Verheugen agreed that commercial and economic, not political, factors were paramount in deciding which plants should survive.
"We are convinced Antwerp has a fair chance. Antwerp has a better chance than certain German plants," he told reporters, adding Flanders would consider filing a complaint with the Commission.
EU scrutiny adds uncertainty to Magna-deal
The German government said it does not anticipate problems in connection with state aid being extended to Opel. A government spokesman said the support package is in line with existing EU guidelines and does not need to be presented to Brussels for special scrutiny. But the EU Commission takes a different view and has announced it will examine closely the conditions attached to German support for the carmaker. EU Competition Commissioner Neelie Kroes said that the rules of the European market do not tolerate protectionism.
However, the required documentation is not expected to arrive from Berlin before the German general election at the end of September. The Magna deal, therefore, faces the prospect of a potential veto from Brussels for another few weeks. This adds further uncertainty to the whole project, which at present consists of little more than a declaration of intent by General Motors and Magna. GM in particular warned that "key issues" still need to be dealt with during the negotiations on the way to a final agreement over the sale of Opel.
Germany hosts Opel meeting
Given these challenges, the German government is trying to move swiftly and has announced a meeting will be held on Tuesday in Berlin, at which European states with Opel factories are invited to discuss and agree on the disbursement of state funds for restructuring measures. But agreement, it seems, does not even exist over who is invited. Belgian foreign minister Yves Leterme complained on Monday that his country had received no invitation. The German government's spokesman denied this.
rri/Reuters/dpa/AFP
Editor: Susan Houlton