EU proposes 5-billion-euro drive for green cars

BRUSSELS: The European Commission on Wednesday proposed an initiative of at least five-billion euros (6.5-billion dollars) to produce safer and greener cars, to be funded by the EU, industry and member states.

The scheme is part of a broader 200 billion euro European stimulus package announced by EU commission chief Jose Manuel Barroso to rescue Europe's ailing economy.

"Smart investments in tomorrow's skills and technologies will accelerate Europe's drive ... to become a dynamic low-carbon economy," Barroso said.

The "European green cars initiative" will include research on new technologies "and smart energy infrastructures essential to achieve a breakthrough in the use of renewable and non-polluting energy sources, safety and traffic fluidity," a commission document said.

The scheme, worth at least five billion euros according to the commission, will be financed by the EU, the European Investment Bank (EIB), industry and the member states.

The EIB will provide most of the money through four billion euros in soft loans to the industry to promote "the safety and environmental performance of cars," including electric cars.

Brussels also proposed reductions in car registration and road taxes for lower emission cars so as to boost consumer interest.