EIB Gives Automakers 7 Billion Euros

The European Investment Bank (EIB) has just approved a 7 billion euros ($8.9 billion) loan package for ailing automakers who are seeking for funds to continue green cars development. According to Reuters, the funds are only granted for the first half of 2009, with more money likely to be approved in late 2009 in case some companies require them. But even so, companies will be asked to provide concrete projects and viable plans in return for more money, EIB president Philippe Maystadt told The Financial Times.

“The EIB is not there to provide short-term liquidity. The EIB is not there to substitute for structural reforms that might be needed by some companies. I want to make clear our role is to support viable projects,” he said.

EIB spokesman Rainer Schlitt told Reuters that the European Investment Bank is willing to help struggling automakers but, in contrast to domestic governments and authorities that provide tax reductions and cash incentives to companies, EU’s lending arm wants to receive its money back.

"We are just giving out loans. We want our money back," Schlitt was quoted as saying.

Several governments across Europe have already approved funding packages for struggling car manufacturers, including France and Spain. While France unveiled a 6 billion euro funding package to local automakers who want to design new green car technologies, Spain provided 4 billion euros to help the domestic companies and preserve jobs at local facilities.

Nissan earlier this day said it requested financial support to the European Investment Bank as the company needs money to support operations across the continent. "I need money to survive and we are not going to get it from the banks at the moment," Eric Nicolas, Nissan's senior vice president finance and administration, told Autonews.