News Column

EU Commissioner Wants a Billion Euros to Prop up Carmakers

Nov. 8, 2012
2013 Volkswagen Tiguan
2013 Volkswagen Tiguan

The European Union should mobilize a further 1 billion euros (1.3 billion dollars) in research funds to help prop up its ailing car manufacturers, the bloc's top industry official said Thursday, arguing that the sector is crucial for the EU economy.

"Every factory closing, for me, is an injury. We need a strong strategy," EU Industry Commissioner Antonio Tajani told journalists in Brussels as he presented a new action plan for the car industry.

It proposes everything from pursuing smarter regulation to promoting European car exports. It notes the need "to increase the resources for research," though it does not mention an amount.

But Tajani said he wants funds earmarked for the automotive industry in the Horizon 2020 research framework to be doubled from 1 billion euros to 2 billion euros in the 2014-20 EU budget.

The multi-year budget is being fiercely fought over, with many EU countries pushing for wide-ranging cuts given the austerity measures they have to implement at home in response to the eurozone's economic crisis.

The financial woes have depleted consumer demand for cars, just as European carmakers struggle to compete against foreign-made vehicles.

"Vehicle sales will not recover to pre-crisis levels in the near to mid future, so the industry needs to adjust for the overcapacity that exists," Ivan Hodac, the secretary general of the European Automobile Manufacturers' Association, said in a statement.

He welcomed the commission's CARS 2020 plan, but also urged the EU to do more to "mitigate the social and economic consequences" of the car industry's restructuring.

He additionally highlighted carmarkers' concerns about EU free trade agreements, which Tajani also said should further take into consideration effects on the domestic automotive industry.

Environmental groups were less enthusiastic about his proposals.

"Commissioner Tajani is helping the car industry by giving it unconditional financial support irrespective of its ability to innovate and reduce its climate footprint," Franziska Achterberg of Greenpeace said.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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