AFTER RECEIVING an initially frosty reception from Brussels, European car industry executives are gaining confidence that a credit programme worth up to €40 billion, supported by the European Investment Bank (EIB), could soon be forthcoming.
Details of the EIB package, a response to America's $25 billion loan for the US industry, could emerge next week, when the European Commission is expected to make a series of proposals to bolster struggling industries.
Carmakers are urging short-term measures, such as offering incentives to drivers who trade in older vehicles, to stimulate collapsing volumes in the industry. Car sales fell by a reported 15.5 per cent in western Europe last month.
The German government will hold talks this week over possible state guarantees for German carmaker Opel. Germany's cabinet last week moved to suspend taxes on new cars bought over the next six months for up to two years in the case of low-emission models.
The tax breaks are part of Germany's €12 billion, two-year package of growth-boosting measures to prop up the slowing economy.
In Britain, Europe's second-largest car market, lobbyists are urging the government to suspend rises in vehicle excise duty.
French president Nicolas Sarkozy has said that he would mobilise €400 million of public money for research and development of low-emission cars. - (Financial Times Service)
