BRUSSELS -(Dow Jones)- The European Union will closely examine any aid package from the U.S. government to its automakers to ensure it complies with international trade rules, an E.U. spokesman said Friday.
Democrats in Congress want to pass a $25 billion government rescue for the 'Big Three' U.S. automakers: General Motors Corp. (GM), Ford Motor Co. (F) and Chrysler LLC. The companies are burning through cash and may face bankruptcy in 2009 without government help.
"We will look very carefully at the details of the proposed aid package to the U.S. auto industry, in order to ensure compliance with international trade rules and assess the potential impact which it may have on trading partners," said Peter Power, trade spokesman for the European Commission, the E.U.'s executive arm.
The U.S. Congress already approved $25 billion in taxpayer-backed loans for the 'Big Three.' Additional aid beyond that appears to have the support of president-elect Barack Obama, but it faces opposition from congressional Republicans and President Bush.
World Trade Organization rules prohibit countries from subsidizing domestic industries in ways that hurt foreign competitors. The U.S. and E.U. are already locked in a WTO battle over subsidies each gives to their major aviation companies, Boeing Co. (BA) and Airbus, a unit of European Aeronautic Defence & Space Co. NV (5730.FR).
-By Matthew Dalton, Dow Jones Newswires; +32 2 741 1487; matthew.dalton@ dowjones.com
