PARIS Dec 20 The European Union is challenging
the terms of a French government-backed debt rescue for carmaker
PSA Peugeot Citroen's financing arm, Les Echos
In a letter to the French government, EU Competition
Commissioner Joaquin Almunia said the state-orchestrated
refinancing of Banque PSA Finance constituted state aid, the
French daily said in a preview of its Friday edition.
Peugeot had no immediate comment, a company spokesman said.
French government and EU officials did not immediately return
calls seeking comment.
A state aid probe by Brussels could ultimately increase the
cost to Peugeot of a 7 billion euro ($9.3 billion) state loan
guarantee granted in October and an 11.5 billion euro
refinancing deal to be finalized with creditors next month.
The EU objections follow a formal complaint received by
Brussels from an unidentified Peugeot competitor, according to
(Reporting by Laurence Frost; Editing by Peter Galloway)