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EU summit seeks a salve for economic woes

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EU summit seeks a salve for economic woes

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The European Commission is satisfied that a French state loan plan for its ailing carmakers does not amount to protectionism, easing tensions ahead of today’s EU summit focused on the economic crisis.

France has proposed a six billion euro state loan for Renault and Peugeot-Citroen with an alleged unwritten pledge not to close facilities in France during the loan period, which could be up to five years.

Germany, Slovakia and the Czech Republic, eastern Europe’s biggest car producer, have all aired opposition to the French plan claiming it undermines the single market.

French Industry Minister Luc Chatel assured the union that no such protectionist elements exist. The summit comes as eastern Europe is wary that its richer western partners are about to hand out state aid to save jobs. Meanwhile, officials have played down the chances of EU leaders making a decision on Hungary’s call for a 180 billion euro package to help central and eastern Europe, whose currencies have taken a pounding as the economic outlook worsens.