Germany mulls Opel aid as workers rally in Frankfurt

7th June 2010, Comments 0 comments

The German government has moved forward a meeting to discuss aid for troubled automaker Opel, as workers demonstrated Monday in favour of loan guarantees that appeared to be slipping away.

A meeting of the fund set up to help enterprises was scheduled for Wednesday, an economy ministry spokesman told AFP, instead of Friday as initially planned.

Opel has asked governments of countries where its European operations are located for 1.8 billion euros (2.2 billion dollars) in loan guarantees so the company can obtain financing at reasonable rates on capital markets.

Germany would provide around 1.1 billion of that sum, with a final decision to be made by Chancellor Angela Merkel and Economy Minister Rainer Bruederle.

Bruederle remains sceptical about helping Opel however, and Merkel appears hesitant to raise taxpayers' hackles after asking them to help bail out Greece and other eurozone countries.

But some 1,000 Opel workers who staged a rally in front of the Frankfurt stock exchange carried signs that said "We do not need billions like Greece, just guarantees to protect German jobs! We are taxpayers."

Opel wants to borrow money to fund development of new models it says could help turn the company around.

The car maker employs around 50,000 people in Europe, of whom more than half are based in Germany.

It wants to eliminate about 8,000 jobs as part of a broad restructuring programme drawn up by its US parent company General Motors.

GM is ready to pay 1.9 billion euros but some German political leaders feel the US group could pay for all of Opel's restructuring itself after posting a profit in the first quarter of 2010.

In Berlin, Merkel unveiled deep spending cuts intended to shore up the finances of Europe's top economy, in a package full of bitter pills for German voters.

© 2010 AFP

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