German Chancellor Angela Merkel has said Europe will examine US measures to help troubled American automakers.

“We will examine how the United States are going to support the auto industry because we do not want European industry to suffer harm,” she told a news conference in Italy.

The bosses of the three biggest US carmakers, Ford, GM and Chrysler, have asked Congress for a USD25bn bailout to cover a growing liquidity gap on their US operations.

The European Union on Friday said it was ready to take action at the World Trade Organisation if it judged that US state aid for its struggling auto industry was ‘illegal’.
“We are looking at the [US] plan. The plan has not yet been made official but certainly, if it amounts to illegal state aid, we will act at the WTO,” European Commission head Jose Manuel Barroso told Europe 1 radio.