Brussels, Belgium – The European Investment Bank (EIB) has freed up €3 billion in loans to finance automotive projects, most of them for “green” initiatives. The bank indicated that a total of €7 billion will become available in the first half of 2009, and its budget allows for maintaining similar levels of financing until 2012.
“The arrangement with the EIB underlines the importance of the automobile industry for investments, R&D and employment in Europe as a whole,” said Ivan Hodac, secretary-general of the European Automobile Manufacturers’ Association (ACEA).
However, Hodac said that the loans will contribute to meeting environmental requirements, but are insufficient to confront the extraordinary economic circumstances, and there is an immediate need for access to financing in general. “At the moment, the financial markets are not functioning, despite billions in government aid to financial institutions,” he said, noting that vehicle sales and automobile manufacturing are largely dependent on credit and financing, due to the capital-intensive nature of the industry and the relatively high purchase price of the product.
“Viable businesses are at stake and the EU risks doing too little too late,” Hadoc said. “This is not a question of bailing out, but of securing a healthy and fundamental industry. The automotive industry is essential to the EU economy. It is the engine of the manufacturing industries, one of the biggest employers in Europe, the largest investor in innovation and R&D, and a formidable export force.”