The rejection of the loan came after two opposing ideas collided on Wednesday, with German Chancellor Angela Merkel announcing an 11.2 billion euro fiscal savings program and German Economics Minister Rainer Bruederle opposing the use of the money for the private sector.
However, the Chancellor isn't giving up, promising the "last word has not been spoken" and calling regional leaders from the four states that host Opel sites to arms, in an attempt to secure the aid at a regional level, if a federal approach is no longer available.
The rejection of the loan for Opel is not to be blamed on GM's sell it-don't sell it cat and mouse game of last year. At least this is what GM believes, blaming the sovereign debt crisis for the new unpleasant situation.
"Had this decision been made at the end of last year or beginning of this year, the climate was different and I think the answer might have been different," Nick Reilly, Opel CEO was quoted as saying by Reuters.
"But now we've been caught up in the current economic and political difficulties that obviously are in the country. I think that has changed the climate for the decision quite signficantly ... so I would not call this retribution."
For GM, the aid rejection means more money are to be sent to Europe from the US. It's unclear at this point how the decision will affect GM's restructuring of Opel.
"GM is naturally very disappointed with this decision as is Opel after such a very long process. We've spent a long time answering many, many hundreds of questions being reviewed by many, many different committees," Reilly added.
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