EU to Discuss Opel Aid on October 7

The European Commission will meet with German officials and representatives from the countries that are hosting Opel production facilities on October 7 to discuss the financial package to be offered to the German brand. Berlin has already announced that it is ready to offer 4.5 billion euros to Opel after Magna completes the takeover deal but several other countries, including the United Kingdom, raised concerns that such an agreement would only protect jobs in Germany.

EU Industry Commissioner Guenter Verheugen said that the meeting will help the European Commission decide whether the German brand should indeed receive state aid.

"What we will do on the 7th of October is to decide on the basis for a decision. The decision will be whether there will be state aid and who is going to pay," Verheugen was quoted as saying by Reuters.

UK Business secretary Peter Mandelson submitted a letter to European competition chief Neelie Kroes in which he asks the commission to closely look at the Magna - Opel deal. He claims the agreement could be driven by political intervention.

“We do not believe the case has been demonstrated that the current Magna proposal is commercially the most viable plan,” Mandelson wrote in the letter. “Capacity at highly efficient plants in Britain and Spain is planned to be under-utilized, in favor of higher utilization of some of GM's other less-efficient plants.”

According to some Magna leaked documents, the Canadian - Austrian partsmaker is looking to cut around 10,900 jobs in Europe. Germany would be the most affected, with 4,116 fired employees. Belgium takes the second position with 2,517 fired employees, followed by Spain with 2,090 and the UK with 1,373.