Merkel warns # 39; # 39 eternal; links to the US EU are not guaranteed
Angela Merkel BERLIN German Chancellor criticized the U S subsidies to its auto industry Tuesday, saying the aid threatened to distort competition and was not a long term solution to the problems of the troubled sector.
Europe can not watch if someone offers subsidies and market forces are removed, said Merkel in an interview on ARD public television hours before Barack Obama will be inaugurated as president U S.
The future of the auto industry can not, in the long run, rely on a state subsidy, she added.
With a deep recession looming, the outlook for the global auto industry is bleak and manufacturers have been forced to cut production due to falling demand.
The U S government has made billions of dollars available to the auto industry, including loans to General Motors GM N, which said its car sales this year U S will be at a low sink for 27 years.
He also pledged loans to automakers financial arms.
European governments are concerned about the heavy U S subsidies would put their own industry at a disadvantage.
Earlier, the President of the Eurogroup and Luxembourg Prime Minister Jean-Claude Juncker also said he was worried about using U to its carmakers, and warned against one-way protectionism.
It can not be the case that automakers U S are long-term grants offered all this is happening in Europe, he told German radio Deutschlandfunk.
Commissioner for Industry Günter Verheugen, at a meeting in Paris on Tuesday that the EU was watching Obama's plans for the auto industry closely and said the bloc would talk with Washington to ensure that its measures were compatible with the global trade rules.
The German automotive industry accounts for about one in five jobs in Europe's largest economy and has significant political influence.
I'm not against the surviving US companies, said Merkel But it can not be the case that subsidies which distort competition are paid over time.
She said that there were clear rules of the World Trade Organization on the issue.
EU governments agreed last week to boost help for their carmakers but called for a coordinated response to prevent a subsidy race.
The European support details have not been decided yet, but are likely to include tax incentives for the purchase of new fuel-efficient vehicles, subsidies to scrap old cars and more loans for manufacturers.
French Prime Minister Francois Fillon said on Tuesday Paris would announce measures for its car industry in the coming days in a package worth 5-6 billion euros.
Merkel warns against U, merkel.