EU issues GM warning over state aid rules

(BRUSSELS) - The European Commission warned on Wednesday that state aid from EU countries under new restructuring plans for General Motors Europe would again have to meet stringent conditions.

"The commission expects the new GM restructuring plan to be based on solid economic grounds, in order to ensure the long-term viability of Opel and sustainable jobs for Opel's workers," a statement said.

"The commission will verify that any financial support from member state governments for the new GM restructuring plan will be fully compliant with EU state aid and internal market rules."

General Motors' shock decision to pull out of a sale of its Opel/Vauxhall unit triggered outrage from the German government and fresh uncertainty for the automaker's 55,000 European workers.

The company explained the abrupt about-turn by highlighting "an improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM's global strategy."

The commission underlined that the German government clarified to it on October 17 that "financial support was available to GM/Opel irrespective of the choice of investor or investment plan, in order to ensure the long-term viability of Opel."

Last month, EU regulators had cast doubt on the old deal, saying there were "significant indications" that German aid of 6.6 billion dollars (4.5 billion euros) had been offered only if Magna and Sberbank won the bid.

State aid is "meant to tackle problems due to the economic and financial crisis, and cannot be used to impose conditions concerning the locations of production facilities within the EU," the regulators added.

"This is essential to avoid subsidy wars between member states and the fragmentation of the single market."