Guenter Verheugen, the European Union Commissioner for Enterprise and Industry, has weighed in on the latest speculation that a proposed deal to sell General Motors' European subsidiary Opel might go against EU rules. In an interview on German public radio, Verheugen, a German national, remained optimistic that the deal was on track.

"Everyone see the necessity or considers it important to give the company a chance," he said.

Under the preliminary deal signed last month, Austrian-Canadian auto parts maker Magna and Russian state-owned bank Sberbank would take a 55 percent share in Opel. Ten percent of the company's shares would be held by the employees while rest would remain with General Motors. The sale was formally approved by GM and the Opel Trust but still faces approval from the EU.

Clearing the EU hurdle

In a letter addressed to German Minister of Economics Karl Theodor zu Guttenberg on Friday, EU Competition Commissioner Neelie Kroes objected to what she described as "significant indications" that the financial aid promised by the German government was tied to the choice of a specific buyer for Opel.

"Such a precondition for the aid would be incompatible with (EU) state aid and internal market rules," the statement said.

Kroes said General Motors, should be "given the opportunity to reconsider the outcome of the bidding process on the basis of written German assurances that aid would be available" irrespective of the investor.

Berlin remains confident deal will pass

Zu Guttenberg reacted by saying he remained confident that the Opel deal would not be derailed by the Commission's concerns. He said there might have been "some confusing statements" from the German government but that those could be cleared up with "the right answers."

Kroes further argued that state aid "is meant to tackle problems due to the economic and financial crisis, and cannot be used to impose political constraints concerning the location of production activities within the EU."

Other EU member states with Opel factories have accused Berlin of using the promised financial aid as a lever to limit job cuts at German factories. Magna and Sberbank are reportedly planning to slash around 10,500 jobs at European plants. Opel employs more than 50,000 people at plants in Austria, Belgium, Britain, Hungary, Poland and Spain.

The EU Commission, which enforces the EU's competition laws, has the power to block such takeovers. But its decisions can be challenged in the European Court.

mz/nk/dpa/AFP/AP
Editor: Andreas Illmer