Bowles urges Commission to stick to its own rules on Opel

1.17.35pm BST (GMT +0100) Tue 29th Sep 2009

Sharon Bowles has urged the European Commission not to agree to a German deal that would save German car manufacture jobs at the expense of jobs in the UK, Belgium and Spain.

The German Government plans to grant a total of €4.5bn in State-Aid to Magna, subsidising the takeover of GM-controlled Opel by the Canadian giant Magna International.

Described by the Economist as "a deal that stinks", the takeover would almost certainly lead to a downsizing of the UK's 5,500 Vauxhall staff. Magna International have announced that they need to downsize the overall workforce by 10,000 in order to make the company economically viable.

Today the European Commissioner for Competition, Neelie Kroes, appeared before the Economic and Monetary Affairs Committee which is chaired by Sharon Bowles.

Following persistent questioning from MEPs she publicly assured the Committee that the Commission will not be swayed by political considerations. She also stressed that the industry has overcapacity and that a viable automotive industry must be secured. The European Commission must approve any state aid deal in order for it to go ahead.

Commenting on the takeover and subsidy Sharon Bowles said;

"I am encouraged by Commissioner Kroes' assurance, but we must hold her to it.

"The possibility of losing 1200 jobs from Spain's Zaragoza plant, only to create 1200 jobs in Germany, brings about serious moral and legal questions.

"This was a beggar-thy-neighbour policy designed ahead of last week's German election. Clearly Magna are being offered a cash incentive to keep Opel's German workforce at the expense of others.

"The Commission needs to stick to its own rules and not be swayed by political pressure from the German government."

ENDS