Paris - The French government will provide funds to subsidize the development and construction of environmentally friendly automobiles, President Nicolas Sarkozy said on Thursday.

"We will earmark more than 400 million euros (550 million dollars) of state funds over the next four years," Sarkozy said in an address at the Paris Automobile Fair.

The money will be used "exclusively" to fund the research and development of "carbon-free cars, that is vehicles with the least possible emission of carbon dioxide, whether electric cars or hybrids," Sarkozy said.

In his speech, the French president also said he would ask the European Commission to loosen regulations on state subsidies to enable EU governments to better support ecological policies.

The aim of looser regulations would be to "align the EU's state-aid framework with the aims we are pursuing within the scope of our climate-energy package," Sarkozy said. (dpa)