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French maker aid?

Time 12 years ago

Government aid for French makersFRENCH car makers may offer the Government a stake in their businesses today – in return for financial aid.

The Sarkozy Government is meeting with bosses of Renault, Peugeot and Citroen today – and is expected to pledge a lot of money to the credit-crunched industry.

Industry minister Luc Chatel has virtually guaranteed aid to the makers, ahead of today’s meeting to confirm the details. Speculation puts the value of the aid package at up to £10 billion.

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‘The situation is serious,’ he told Le Figaro newspaper, before revealing that favourable-rate loans, loan guarantees and convertible bonds were all being considered as a way to aid the French car makers.

In return, car makers would have to commit production in France, securing jobs. ‘We will not be the Government that will support and accept the closing of factories,’ he warned.

The French Government used to wholly own Renault. Today, its share is 15 per cent, while PSA Peugeot Citroen remains independent.

Chatel told the newspaper that 2 of the world’s top 10 car makers are French. The Government, it seems, intends to help the industry retain this position.

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Today’s meeting will be watched closely – by both Car Dealer and the UK Government, amongst many others…

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