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German and French carmakers, which have asked the European Commission for €40bn ($53bn) in cheap loans, are eligible to tap their governments’ banking rescue plans, according to government officials.

Both the German and French finance ministries said on Monday that the financing arms of carmakers could use the state guarantees for new lending of up to €400bn and €320bn respectively.

The financing arms account for more than 15 per cent of operating profits at the European carmakers, according to analysts at Morgan Stanley, and car manufacturers have a large short-term refinancing need because of the credit they offer their customers.

The availability of government credit guarantees comes as the European car industry faces up to its toughest time in decades as demand is plummeting in countries including the US, the UK and Spain.

Also, carmakers have to invest billions of euros to meet stringent new emissions targets by regulators.

Full article here: http://www.ft.com/cms/s/0/b03a4940-9ed1-11dd-98bd-000077b07658.html
 

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Discussion Starter · #4 ·
Many European countries now have "rescue funds" for the financial crisis very similar to the U.S. I think the point is, the domestics in the U.S. probably could use governmental funding more than some European Automakers...yet as of now they haven't gotten a large ammount.....the European Automakers seem to be, as a whole, in better shape..but yet they already are eligible for funding if needed.
 
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