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More funds are needed to help Europe's struggling car producers survive the global economic slowdown, French and German leaders said this week.
They said more subsidies would not be protectionist because they would also save jobs for suppliers and other parts of the economy in many nations outside the home of the parent company.
French President Nicolas Sarkozy and German Chancellor Angela Merkel said that EU subsidy guidelines are too stingy and need to be updated.
"We are a bit restricted on the possibility of credit," said Sarkozy after a summit of EU government leaders. "If you say 'yes', it really is to get going. It is not to stop halfway."
He was critical of the European Investment Bank limiting its aid. "These are global players," said Sarkozy of French car makers Renault and Peugeot Citroen.
But EU Commission President Jose Manuel Barroso ruled out direct subsidies to manufacturers, saying Europe 'was no longer living in the 1980s' when state intervention was more common.
The recession has hit Europe's car industry hard. The world's largest, it produces more than 18 million vehicles, but at the last count sells only about 12 million a year. It employs some 12 million people directly and many more in the supply chain.
