PSA Peugeot Citroen has got temporary approval from Brussels for some of the state aid it is being offered by the French government.
The European Commission said the struggling carmaker can have 1.2 billion euros of guarantees for its financing arm – Banque PSA Finance – but in return it has to present a restructuring plan for the entire company within six months.
The Commission said it was granting temporary approval after France offered to guarantee seven billion euros of the company’s borrowing.
“We expect France to notify us of a restructuring plan, not just for the banking arm but for the whole PSA group, because this aid also benefits the whole group,” a Commission spokesman said.
France would need to ensure both Banque PSA Finance – which provides credit for buyers of Peugeot and Citroen cars as well as providing broader finance to the group – and PSA as a whole were viable in the long term without state support.
Although it is unclear how deep such restructuring should be, the statement will heighten pressure on France’s biggest carmaker, which is already cutting 8,000 jobs and closing a major assembly plant.