Automakers and politicians are lining up to challenge the EUR7bn (US$9bn) put up by the French government as a guarantee for PSA Peugeot Citroen's banking arm.

Should the credit guarantee by approved by the French Parliament and the European Commission, it could allow Banque PSA Finance to request a total of EUR11.5bn in cash facilities, but Ford, Renault and the Volkswagen's home German State of Lower Saxony, are queueing up to question the deal.

"We are looking to discuss it [guarantee] within ASEA [European Automotive Manufacturers' Association]," Ford of Europe chairman and CEO, Stephen Odell, said. "I did read Lower Saxony were planning to raise the issue with the European Union [EU].

"It is worthy of investigation to determine whether or not it is State aid. Brussels could in theory, not allow the State aid to proceed. That is fairly difficult given the nature of the EU, but it could be the European Court decrees it is not able to supply that level of State aid."

Renault - itself the recipient of an enormous government loan of EUR3bn during the economic crisis - is also raising concerns surrounding the French government's plan with CFO Dominique Thormann highlighting the issue.

"[Thormann] said the details have not been disclosed yet, so it is obvious we are going to have a very careful look on this," a Renault spokeswoman in Paris told just-auto. "It is important not to distort the market.

"He [Thormann] said we need to have the precise details to evaluate the impact this plan will have. We had a loan with PSA of EUR3bn following the crisis. That has been paid back with interest."

Lower Saxony Prime Minister, David McAllister, has also weighed into the debate, maintaining loans are not the solution for vehicle manufacturers in financial difficulties.

The German State has a huge interest in what is happening in France as it is a 20% shareholder of Volkswagen.

"The Prime Minister said Lower Saxony sees these State loans very critically," McAllister's spokesman told just-auto from Hannover. "They won't help solve the problems certain European States have with their automotive industry.

"We have not asked for [a] review from the European Commission."

French Prime Minister, Jean-Marc Ayrault, insisted however, there were no "presents" being made to PSA and highlighted the stark danger for the domestic manufacturer if nothing was done.

"If we don't do anything, it will be not just [PSA Aulnay] in danger, also Rennes and Sochaux," Ayrault said this week. "There is a very important responsibility not to let this industry sector fall.

"Not at any price of course. My government does not have the intention to make presents without commitments."

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more