The French prime minister has called on Europe to follow the lead of the US and put a package in place to help the continent's auto industry.

Speaking in the French senate, Francois Fillon said: "We know that the United States have just decided support of $25 billion for the American automobile industry.

"It would not be acceptable for Europe not to equip itself with tools to allow our automobile industry to get through this difficult passage in the crisis," he was quoted as saying by Reuters.

The European Commission yesterday agreed to back a call for EUR40bn (US$50.9bn) in soft loans to help develop cars that meet toughening European Union CO2 emissions targets.

"Loan subsidies could be provided via the European Investment Bank," EU industry commissioner Guenter Verheugen was quoted as saying yesterday.

A statement from the Commission said: "Car makers have pressed the EU for a EUR40bn loan to help develop greener vehicles. The idea gained support in Europe after the US recently approved EUR20bn ($25bn) in low-interest loans to the American auto industry to finance more fuel-efficient cars.

"The limits on car emissions are part of a climate-change package that the EU aims to pass by the end of the year. The commission has urged EU governments not to let the package fall victim to the economic slowdown."