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German EcoMin says no rush decision on Opel aid

  German Economy Minister Karl-Theodor zu Guttenberg said on Monday he would not be pressured into making a quick decision on granting state aid to struggling General Motors unit Opel.

Germany is considering whether to support Opel after GM Europe unveiled a plan to spin off its German arm to try to avert job cuts and plant closures and said it needed €3.3 billion ($4.16 billion) in aid from European governments.

“Let’s not allow ourselves (to) be pressured,” Guttenberg told reporters after meeting GM Europe’s chief. “I will seek contact with the parent company to discuss remaining open questions, and to gain an impression of where the parent company wants to go,” Guttenberg added. “I will, given my US trip in two weeks, also talk to the American government.”

Chancellor Angela Merkel said on Saturday a decision on state aid for Opel depended on the firm’s long-term outlook and on the readiness of banks to help.

Less than seven months before an election and facing the deepest recession since World War Two in Europe’s biggest economy, Merkel is keen to save as many of the roughly 25,000 jobs at Opel’s four German plants as possible. She has said she could be open to offering financing guarantees, depending on her assessment of the revamp plan.

German media have reported 8,000 to 11,000 jobs are at risk.

The state premiers of Hesse and North Rhine-Westphalia, which together rely on Opel for about 21,000 jobs plus thousands more at suppliers, said they were ready to help if they could. The central idea of the overhaul is to split off Opel, including the UK’s Vauxhall, into a unit which would be majority owned by its US parent. Outside investors would take a stake of more than a quarter.

Merkel is determined that no state aid could end up flowing back to GM, itself seeking a federal bailout to stay afloat. (Reuters)