EU says French rescue of PSA bank qualifies as state aid

20th December 2012, Comments 0 comments

French government guarantee pledges to the financial arm of struggling automaker PSA Peugeot Citroen qualify as state aid to restructuring and must be approved by the EU, Competition Commissioner Joaquin Almunia said Thursday.

Asked at a news conference whether France had notified the Commission over the bank guarantees in October, Almunia said that "as far I know the notification has not yet arrived but we have decided to ask the French authorities to send it."

France had offered to support the group's credit arm BPF to the tune of up to 7.0 billion euros ($9 billion) in bank guarantees.

Almunia said that at the outset the help appeared to be "a question solely to do with the branch financing PSA car sales, but in reality what we saw was that it was more an aid to restructure an entity."

In that case the Commission must "receive due and proper notification in order to analyse" the aid and determine whether it conforms with European legislation on state aid and does not hinder competition, he said.

There was no immediate comment from the finance ministry in Paris or from PSA.

© 2012 AFP

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