UPDATE 2-EU approves German loan to Arcandor Quelle unit

* Germany to provide loan guarantee of 50 mln eur

* EU Commission approves aid

* German economy minister says Quelle not safe yet

(Recasts, adds EU decision)

BERLIN, June 30 (Reuters) - European Union antitrust authorities approved on Tuesday a rescue aid loan from Germany to the mail-order unit of insolvent German retailer Arcandor (AROG.DE).

The European Commission, in charge of monitoring state aid in the 27-country bloc, said in a statement that the aid complied with EU guidelines as it was a loan and limited in time.

After a four-hour meeting on Monday, Germany, together with two state governments, agreed to provide the stricken Quelle unit with a loan guarantee of 50 million euros ($70 million) until the end of this year.

The future of Quelle had been in limbo for weeks as its request for state aid became a political football ahead of general elections in September.

Monday's decision marked a turning point after the government rejected Quelle parent Arcandor's calls for state aid this month, saying its owners had not pitched in enough money to mount a joint rescue for the group. [ID:nL9454449]

German Economy Minister Karl-Theodor zu Guttenberg said on Tuesday Quelle was not home and dry. "Quelle is by no means saved yet, even if others are claiming that is the case," Guttenberg told German television.

"Quelle has got a chance, a fair chance, until December 31."

Quelle urgently needed the funds to get its mail order catalogue out to its customers. The catalogue had been held up after Quelle's factoring bank cut its funding off following Arcandor's insolvency. ($1=.7143 Euro) (Reporting by Erik Kirschbaum and Dave Graham; Editing by Jon Loades-Carter and Simon Jessop)