Thursday, December 18, 2008

Romania could guarantee EIB loans for autos

BUCHAREST, Dec 17 (Reuters) - Romania's government is offering to guarantee loans worth 500 million euros ($701 million) from the European Investment Bank for Ford and Renault, which have production units in Romania, it said on Wednesday.

Renault, which owns Romanian carmaker Dacia, needs guarantees for 100 million euros, and Ford Motor Co, which has recently bought Automobile Craiova, for 400 million euros, deputy finance and economy minister Eugen Teodorovici said.

The European Union member would guarantee 80 percent of the value of the loans from the EIB, the EU's lending arm, he said.

Romania is one of several EU states that have offered support for the car industry to avoid job losses at a time when the global credit squeeze cuts demand.

Earlier this month, its outgoing centrist minority government tripled a registration tax for second-hand cars to boost new car sales and help the country's ailing auto industry.
It has also suspended the tax on new cars for a year.

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