Wednesday, November 12, 2008

Germany rejects General Motors' plea for state aid

Special Report: Global Financial Crisis

    BERLIN, Nov. 11 (Xinhua) -- The German government on Tuesday rejected a plea from U.S.-based General Motors (GM), the world's biggest carmaker, for targeted aid for its German factories.

    Opel, GM's German arm, had earlier written to Chancellor Angela Merkel requesting that she push harder for a 40 billion euro (51.4billion dollar) loan from the European Investment Bank (EIB) to carmakers, German news agency DPA reported.

    Opel also requested soft loans for German buyers of new cars and a government buy-in of older cars to stimulate the flagging German car market.

    Merkel's coalition government last week agreed on an economic stimulus package that includes a suspension of vehicle tax for one year on new cars bought in Germany, with a double rebate for low-emission cars.

    Yet, a government spokesman said no further plans had been made, and the EIB credit to the auto industry, according to the stimulus package, was likely to be decided upon by European Union leaders at a summit next month.

    GM, whose shares hit a 65-year low of $2.76 when they tumbled 15 percent on Tuesday, has also lobbied the U.S. government for financial aid. The U.S. Treasury has so far refused to extend its Troubled Asset Relief Program (TARP) to U.S. carmakers.

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