German coalition government divisions over aid to Opel have widened

Article by Christian A., on August 27, 2010

The situation is getting more complicated as German coalition government divisions continue to bicker over whether to provide aid to Opel, whose parent is General Motors Co.

Last Thursday, Chancellor Angela Merkel met with the heads of four regional states with Opel plants to go over financing options after her economy minister, Rainer Bruederle of the liberal Free Democrats (FDP), denied federal aid last Wednesday.

Even as Merkel pushed for a center-right coalition with the FDP before September's elections, Bruederle has been causing disagreements in Berlin on matters ranging from tax cuts to health care reform.

Merkel has had a record for working amicably with the Social Democrats in the previous legislature but this time, she is reportedly upset over the FDP's opposition to state aid for Opel.

Merkel said that a decision has yet to be finalized and that she would do what she can to get support for Opel's 25,000-person workforce in Germany.

Opel is asking for 1.1 billion euros ($1.32 billion) in German state aid as part of a 3.7 billion euro package. GM will provide 1.9 billion euros to the plan but it is hoping to get the rest from loan guarantees from European governments. [via autonews - sub. required]

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