France tells EU it can oversee Renault plans: sources

(BRUSSELS) - France on Tuesday warned European regulators that its 15 percent public shareholding in Renault gives it the right to oversee the automaker's plans.

France's number two carmaker, Renault, has come under heavy pressure from Paris to keep jobs at home following press reports about a planned shift from a plant outside Paris to Bursa in Turkey from 2013.

Renault chief Carlos Ghosn assured French President Nicolas Sarkozy 10 days ago that production of its new Clio model would not be entirely transferred to Turkey as the government had feared.

Sarkozy told millions of prime-time viewers on French television late on Monday that he would not stand for French-owned cars being built elsewhere when they are sold to French drivers.

The European Commission wrote to France after Sarkozy's meeting with Ghosn and a French diplomat and a European Union source said that the long-awaited reply was received on Tuesday.

In it, Paris stressed that it "has the right to act with vigilance, this point cannot be denied," said the French diplomat.

Tensions have risen over French state interference in the car industry in Europe, which is undergoing deep restructuring with production moving out of the region, plants being shut and thousands of jobs being lost.

However, the French diplomat insisted that Paris did not ask Renault for any "deal involving the relocation of activity in France" and said such demands would not be asked of any French manufacturer.

The commission is querying the French stance under conditions allowing Paris to grant temporary loans to the battered car industry at the height of recession last year.

According to the EU official who requested anonymity, France told Brussels in its letter that "automakers are free to develop their activity according to strategies decided by their boards of directors."

Spokesman Jonathan Todd said Brussels could only intervene directly using anti-competitive legislation if France blocked access to its market for car exporters from other EU member states.