ECOFIN: French Fin Min: Aid To Auto Makers Not Protectionist

ECOFIN: French Fin Min: Aid To Auto Makers Not Protectionist BRUSSELS -(Dow Jones)- French government aid to the country's automobile industry isn't protectionist, Finance Minister Christine Lagarde said Monday. Earlier, President Nicolas Sarkozy announced that car makers PSA Peugeot-Citroen (12150.FR) and Renault SA (13190.FR) are to receive EUR3 billion loans each from the state as part of a broader plan to underpin the sickly French automobile industry. Sarkozy also said the amount of credits that are being made available to automotive suppliers is being doubled to EUR600 million. As part of their loan agreements, Peugeot-Citroen and Renault have agreed not to close any French plants for the duration of the five-year loans. Arriving at a meeting of finance ministers from the 16 countries that use the euro, Dutch Finance Minister Wouter Bos said the European Commission should review the French plan. "There is no protectionist trend" in the loan package, Lagarde said as she arrived for the meeting. The French move prompted concerns that Germany, Spain and Sweden would be obliged to offer similar support to their automakers in order to preserve fair competition in the industry. "I am a bit concerned that day after day, member state after member state are arranging...their own plans and programs," Luxembourg's Prime Minister and Finance Minister Jean-Claude Juncker told reporters on his way into the meeting. Juncker chairs the gathering. "Of course, we need more coordination," Lagarde said.