Citroen Crises Deepens, Lands French Government Into More Trouble Over Bailout
(Bloomberg News) Global car makers have voiced their concern over the EURO 7 billion loan for PSA/Peugeot-Citroen guaranteed by the French government. These carmakers voiced concerns that the French government loan guarantee for PSA’s troubled car-loans division will give PSA an unfair advantage in Europe’s dwindling vehicle market. Stephen Odell, chief executive of Ford of Europe CEO, disclosed that there were questions among some carmakers over the legality of PSA’s refinancing deal. Odell remarked that it is not sustainable for government support to keep competitive companies going forward, particularly in a protracted downsized economy.
Renault Chief Financial Officer Dominique Thorman said the carmaker will pay “close attention” to state support for PSA. Renault wants to ensure that the rescue package does not give PSA unfair advantages. Thorman remarked that once Renault understands the details of the refinancing scheme for PSA, its interest is to ensure that there would not be any distortion of competition. The French government holds a 15-percent share in Renault. Last Tuesday, Lower Saxony expressed opposition to the French government refinancing for PSA. Lower Saxony indicated that the German government would ask for a European Commission review. European Union rules do not allow member countries to provide state aid to local companies, which give them an unfair advantage over rivals in other EU countries.
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