Opel jobs

European governments are being urged to avoid a bidding war to deflect job cuts by US car giant General Motors onto their neighbors.

Reports that more than a billion euros worth of state aid have been offered to protect jobs at the firm's European arm Opel have prompted calls for restraint.

Opel employs around 50,000 people in Europe, around half of those jobs being in Germany - where there is political deadlock over how to act.

Britain has said that aid of around 400 million euros was possible while Spain has said it would find a similar amount. Belgium has bid up to 500 million euros, while Poland has offered tax incentives, according to the German news magazine Der Spiegel.

The report comes ahead of a visit to Brussels by new GM Europe chief Nick Reilly to discuss the future of Opel. GM has said that it plans to cut around 10,000 jobs across the firm.

Conflict over subsidies

Germany's governing coalition partners disagree on the issue of state funding with the pro-business Free Democrats (FDP) strongly against subsidies and Angela Merkel's Christian Democrats (CDU) more in favor.

German Economics Minister Rainer Bruederle, from the FDP, repeated his opposition to government aid for Opel across the EU on Saturday.

"It is in the interests of all the states involved to avoid a subsidy war," he said.

In the German federal state of North Rhine-Westphalia, CDU Premier Juergen Ruettgers wants state money to be spent on saving jobs at Opel's plant in the city of Bochum. Other Opel factories are in Ruesselsheim, Eisenach and Kaiserslautern.

EU Industry Commissioner Guenther Verheugen, who will meet the GM Europe boss on Monday, is against any form of government aid. Earlier this year, the commission criticized the German government for offering financial help to would-be buyer Magna in order to minimize job losses in Germany.

Informal promises 'alarming'

"I understand that some countries have already made informal promises. I find that alarming," Verheugen told Der Spiegel. He said that he wanted to "avoid putting jobs up for auction."

German Finance Minister Wolfgang Schaeuble has demanded clarity from GM over its plans, ahead of the meeting.

"From Detroit we hear that GM needs no state money for Opel. To that, I say all the better!" he said in an interview in the newspaper Bild am Sonntag. Schaeuble said that companies had should think about corporate responsibility, not about maximizing short-term profits.

rc/AFP/dpa
Editor: Kyle James