France's Fillon slams "protectionist" claims

Feb 12, 2009, 14:16 GMT

Brussels - French Prime Minister Francois Fillon on Thursday rejected claims that a plan to prop up France's struggling car makers is protectionist, saying it would also save jobs in other European countries such as the Czech Republic and Spain.

'The protectionism debate won't stand up to an examination of the facts. Just because people use words like protectionism, there's no real debate concerning the French plan,' Fillon told journalists after talks with European Commission head Jose Manuel Barroso.

Fillon's visit to Brussels came three days after French President Nicolas Sarkozy announced a 7.8-billion-euro (10.1-billion-dollar) aid package for France's auto industry, which has been hard hit by the global financial crisis.

Officials in Brussels have since expressed concern over reports that massive loans to car makers PSA Peugeot Citroen and Renault would be coupled with an obligation not to move production to other countries and to buy parts only from French producers.

The EU's executive was examining the French plan to make sure that it would not cause job losses or other negative impacts on other EU members, Barroso said.

Barroso has repeatedly warned member states against falling into the trap of 'economic nationalism' and protectionism.

Fillon said the aid was necessary as the French car industry had seen sales fall by a staggering 40 per cent in the last months of 2008. He called the situation an 'extreme crisis' and urged voters to understand the need for the massive bail-out.  

He also argued that the bail-out would help save jobs at French car makers' factories elsewhere in Europe.

'If Renault and Peugeot don't benefit from the means to finance their debt in the next three months, how do you think they'll be able to make their factories in the Czech Republic, Spain, Portugal, Britain, Slovenia and Slovakia work?' Fillon said.

The comment appeared directed at officials in Prague, who last week accused Sarkozy of protectionism after he said he would like to see French car production brought home from foreign sites such as the Czech Republic.

Since then, French and Czech officials have scrambled to limit the damage, with Sarkozy on Monday saying that French car firms had only committed themselves 'not to shut any factories for the duration of the loan and to do everything to prevent redundancies.'

Czech Prime Minister Mirek Topolanek said during a visit to Brussels on Wednesday that he regretted the public spat with Sarkozy, saying 'I learned a lesson: next time I will make a telephone call.'