There is no need to question the decision to provide EUR4.5bn in aid for General Motors’ Adam Opel unit and there is no need to repeat the bidding process, German government spokesman Ulrich Wilhelm said on Monday.
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“There is no reason to call into question previous decisions,” Wilhelm told Dow Jones Newswires in a response to criticism by European commissioner for competition, Neelie Kroes, over German aid for Opel.
General Motors was expected to complete the sale of a majority stake in its Opel and Vauxhall brands to Austrian/Canadian partsmaker Magna and Russian bank OAO Sberbank in the coming days.
An economics ministry spokesman told the news agency the ministry hadn’t sent a letter to the commission in response to the criticism, but awaited a reaction from General Motors and the trust that controls Opel.
He also said the ministry didn’t expect any fundamental problems with Brussels regarding competition issues on Opel aid, adding that the decision to choose Magna was an economic one and not a result of political pressure.
Concerns raised by EU competition regulators had apparently delayed the signing of the proposed deal for GM to sell a majority stake in Opel/Vauxhall to Magna/Sberbank.
There were strong indications that the deal would be inked last week, but the latest twist appears to have added a further late complication.
Kroes had written to Germany’s economics minister Karl Theodor zu Guttenberg expressing her concerns that, according to the commission’s preliminary inquiries, there were ‘significant indications’ that aid promised by the German government to ‘new Opel’ was subject to the pre-condition that a specific bidder, Magna/Sberbank, was selected to acquire a majority of the shares in ‘new Opel’.
During the bidding process in the summer German regional and national government representatives frequently expressed a preference for Magna’s bid which appeared to be linked to assurances on protecting Opel jobs in Germany. There were also suggestions that financial aid from Germany to Opel in Germany was also dependent on Magna’s bid being selected by GM.
Kroes indicated that such a precondition for the aid would be incompatible with EU state aid and internal market rules.
The letter also said that GM and the Opel Trust ‘should be given the opportunity to reconsider the outcome of the bidding process on the basis of firm written assurances by the German authorities that the aid would be available, irrespective of the choice of investor or plan, in order to ensure the long-term viability of New Opel, and subject to reasonable financing conditions’.
In her letter Kroes pointed out that state funding is meant to tackle problems due to the economic and financial crisis, and ‘cannot be used to impose political constraints concerning the location of production activities within the EU’.
In a letter sent on 7 October to Germany and the six other member states where ‘new Opel’ has activities (Austria, UK, Spain, Belgium, Poland and Hungary), commissioner Kroes had drawn attention to the need to ensure that such aid does not affect the economic freedom of the beneficiary undertakings to develop their activities within the EU’s single market.
Over the weekend zu Guttenberg played down suggestions that the EU’s latest involvement threatened the sale of a majority stake to Magna.
Reuters reported that zu Guttenberg said the deal was ‘on track’ and voiced confidence that Germany could resolve the questions raised by Kroes.
Asked whether her concerns could doom the sale to Magna, he replied: “No, I don’t believe that.”
