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Opel sale contract waits as German-EU talks go on

Germany and the European Commission are still working out an accord that would let a group led by Canada's Magna sign a contract to take control of European carmaker Opel, a top minister said. German Economy Minister Karl-Theodor zu Guttenberg said on Thursday that talks with Brussels were “constructive” but that issues remained to be resolved before Magna could sign a deal with Opel's former parent General Motors.

“We can only sign when we're in agreement,” Guttenberg told Reuters in Berlin. “There is still a constructive dialogue.”

In Brussels, a spokesman for European Competition Commissioner Neelie Kroes dismissed speculation that Kroes was not prepared to endorse the deal or had demanded a new tender for Opel.

Sources in Germany close to the transaction played down concerns about the signing, adding the formal sale document was set to be inked by early next week.

The signing of the deal would cap weeks of negotiations by the companies and Opel labor leaders, but crucial details on financing, including €4.5 billion ($6.71 billion) in aid being sought from states with Opel plants, must be resolved before it can close.

GM decided last month to sell a 55% stake to Magna and its Russian partner Sberbank.

Opel's 50,000 staff is supposed to get a 10% stake in the new company in return for cost concessions, while GM will keep a 35% stake.

Countries with Opel plants have fought to save jobs and avoid plant closures amid promises of billions in state aid.

Workers representatives at Vauxhall, Opel's British sister brand which employs 5,500 people, reached an agreement with Magna earlier in the week after Magna agreed, among other concessions, not to implement enforced redundancies.

Unions and government in Spain have yet to agree on a solution for Opel's Zaragoza plant.

In Belgium, unions agreed to €20.2 million of cost savings at the Antwerp plant after Magna pledged to look into keeping the plant open. The facility had been seen as a top candidate for closure.

Poland's economy ministry declined to confirm a radio report saying the government would award €450 million in aid.

“Poland plans to provide assistance whose amount will depend on the requests and needs of the New Opel in Gliwice,” a spokeswoman for Poland's economy ministry said.

The Opel plant in Gliwice builds Zafira and Astra models.

In Spain, unions and government plan to continue negotiating with Magna after Opel's prospective new owner offered to return 72% of production of the new Opel Corsa to its Spanish plant in 2013.

Until then, production will drop to 70% in favor of Germany, the Canadian car parts manufacturer said during a meeting with the regional Aragon government and union leaders in Zaragoza, northern Spain, home to the Opel factory which employs around 7,500 workers.

“Regional and national government together with union representatives of the Figueruelas plant will study the latest proposal from the consortium regarding the plant tomorrow,” the Aragon regional government said in a statement on Thursday.

The Opel plant at Figueruelas employs 7,500 and Magna had proposed cutting between 1,300 to 1,650 jobs there.

Magna's initial restructuring plans for Opel, which involve laying off more than 10,500 workers in Europe, have run into stiff opposition from European governments.

Magna and Sberbank have vowed to inject €500 million into the carmaker, aiming to use it to make a push into the Russian market.

The European Commission is keeping a close eye on the deal to ensure state aid is not misused for political purposes. (Reuters)