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UPDATE 1-EU's Kroes urges speedy EU answers on Opel state aid

Published 09/29/2009, 06:28 AM
Updated 09/29/2009, 06:33 AM

* Kroes: Time running out for EU countries to submit facts

* EU Commission to consider only commercial factors (Recasts, adds more quotes, background)

By Foo Yun Chee

BRUSSELS, Sept 29 (Reuters) - The European Union antitrust chief on Tuesday urged EU countries with Opel plants to present details of their proposed state aid for the carmaker to the European Commission as soon as possible.

In a bid to safeguard jobs in Germany, Berlin has promised 4.5 billion euros ($6.6 billion) in aid to carmaker Opel which is due to be sold to Canadian auto parts group Magna, drawing criticism from other EU countries with Opel factories.

Britain and Spain, concerned that this could spell more job losses for their Opel facilities, have written letters to the EU executive questioning the German aid.

"We are asking the question, we are waiting for facts and figures to come to our final approach, the timeframe the sooner the better. We are running out of time," European Competition Commissioner Neelie Kroes told the European Parliament.

She said she would not accept a short-term solution and that the Commission would take only commercial considerations into account when deciding whether to approve the proposed state aid.

Earlier in her speech to the European Parliament, Kroes said European Union governments should not use massive bailouts of crisis-hit banks as a pretext to rescue other sectors which do not pose a systemic risk.

Since the credit crisis deepened a year ago, EU countries have committed trillions of euros to help banks weather the global crisis, sparking calls from other sectors such as the car sector for state aid too.

Kroes, who last week warned governments against "bribing companies" to preserve jobs, said on Tuesday there was a clear distinction between financial institutions and other industries.

"We also need to be clear that the financial sector was a special case. The substantial interventions in the financial sector should not be used as an excuse for massive state aid in other sectors," Kroes said.

"This is not because we care more about bankers than workers in other sectors. It is because the financial system is the lifeblood of our whole economic system," she said.

The European Commission and officials from countries with Opel plants will discuss on Oct. 7 Germany's state aid plan, EU Industry Commissioner Guenter Verheugen said last week.

Kroes spearheaded an investigation into the pharmaceutical industry earlier this year on suspicion some drugmakers could be colluding with generics firms to hold back cheap medicines, and said she expected to announce more cases shortly.

"We are also now capitalising on our pharmaceutical sector inquiry with new cases. So please look out for further news in the coming months," she was set to tell the European Parliament.

The EU executive is now investigating privately owned French drugmaker Servier and generics firm such as Krka d.d., Lupin Ltd, Matrix Ltd, part of Unichem Laboratories Ltd, and Israel's Teva Pharmaceutical Industries Ltd. (Additional reporting by Bate Felix; Editing by Dan Lalor and Rupert Winchester) ($1 = 0.6822 euro)

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