EU officials back aid for car sector

STRASBOURG, France (Reuters) - European carmakers may need financial aid from the bloc and its governments, senior EU officials said on Wednesday, singling out General Motors unit Opel as a possible emergency case.

They were speaking before German solar company Solarworld AG announced it planned a bid to buy GM's Germany-based Opel plants, although GM subsequently denied Opel was for sale.

European auto firms have asked for 40 billion euros (33.4 billion pounds) in soft loans for the industry, hit hard by the global financial crisis. Opel is negotiating aid with the German government, while financially struggling GM has asked for a U.S. government bailout.

"Targeted and temporary measures to support European producers might be useful, in part to increase technological and ecological performance," French Minister for European Affairs Jean-Pierre Joyuet told the European Parliament.

He said France, which holds the EU's rotating presidency, would ensure the issue is debated at the bloc's summit in December, after the executive European Commission is expected to propose general economic stimulus measures on November 26.

EU Industry Commissioner Guenter Verheugen -- a German Social Democrat who has championed support for the sector -- said aid should promote environment-friendly vehicles. He added the Commission assumed 2009 would be crisis year for the industry.

"You don't want to give people tax incentives to buy any old car, you want to increase demand for environment-friendly cars," Verheugen told the Strasbourg-based assembly, which has called an urgent debate on the industry.

"The situation is clear, the automobile industry is a key industry, maybe the key industry. We have to champion sustainability of the industry," he said, adding any aid should not distort competition on the bloc's single market.

Verheugen, however, told Germany's Tagesspiegel daily he was against a European-wide protection shield for the car sector.