The German government’s decision to step in and save struggling car manufacturer Opel has opened up divisions in the country’s ruling coalition.
With just four months to go before a federal election, the 11th hour deal to back the Magna takeover of GM Europe is threatening to split Chancellor Angela Merkel’s conservative alliance.
Economy Minister Karl-Theodor zu Guttenberg was opposed to the rescue and it has emerged that he offered to resign when his protests were ignored.
The pro-business wing of Merkel’s CDU Party fear the support for Opel will only encourage more companies to seek state handouts.
However the centre-left SPD who share power in the grand coalition are angered by Guttenburg’s defiance of Merkel. He was prepared to let Opel go to the wall.
More than 1000 German companies are now said to be queuing up for state aid.