German Finance Ministry mulls aid for Opel

BERLIN: Germany's Finance Ministry is exploring the possibility of providing aid for carmaker Opel despite the scepticism of the country's Economy Minister Rainer Bruederle.

Without citing sources, German daily Der Tagesspiegel said the ministry was considering freeing up aid for the General Motors unit that would not come from the country's rescue fund for struggling firms, so that Bruederle would not have to give his assent.

Two government officials, speaking on condition of anonymity, said on Wednesday that the report was false. Loss-making Opel is seeking state aid for a turnaround plan, but GM's strong balance sheet and its return to profitability from bankruptcy in just 12 months is undermining the arguments for state aid for its European subsidiary.

"In my view General Motors is in a position to take steps to modernise itself through its own efforts," Bruederle said on ARD television on Wednesday. Four officials from the German rescue fund, including Chancellor Angela Merkel's chief economic advisor, are due to recommend later on Wednesday whether to risk 1.1 billion euros of taxpayer money to backstop private-sector loans for Opel.

If the federal government does not grant aid to Opel, the four German states that are home to plants could still step in.