The EU is challenging the terms of the debt rescue for Banque PSA Finance offered by the French government.
According to Les Echoes newspaper, EU Competition Commissioner Joaquin Almunia sent a letter to the French government in which it accuses the state of orchestrating refinancing of PSA Peugeot Citroen’s financing arm, Banque PSA Finance. When asked if France had notified the Commission regarding the bank guarantees two months ago, Joaquin Almunia said that “as far I know the notification has not yet arrived but we have decided to ask the French authorities to send it.”
“The help appeared to be “a question solely to do with the branch financing PSA car sales, but in reality what we saw was that it was more an aid to restructure an entity,” said Almunia.
She added that the Commision has to receive due and proper notification to be able to analyze the aid and decide whether it conforms with the EU legislation on state aid and that it does not hinter competition. In October PSA and the French government discussed a deal according to which automaker’s financial arm, Banque PSA Finance will be offered new loans if Peugeot reduces job cuts and guarantees the future of its plants in the country.