Germany has reassured GM on Opel conditions, Brussels says

Germany has reassured GM on Opel conditions, Brussels says Brussels - The German government has sent assurances to General Motors, the Opel Trust and the European Union's executive that the company's owners will receive the same level of state aid no matter to whom they sell Opel, EU officials said Monday.

The news comes after the European Commission on Friday unveiled suspicions that the German aid was conditional on Opel being sold to a consortium headed by Magna of Canada and Russian bank Sberbank.

"What we have had is indications that the German authorities have, as we had requested, written to the Opel Trust and General Motors explaining that the aid would be available irrespective of the choice of investor or the plan," commission spokesman Jonathan Todd told journalists in Brussels.

A German economics ministry spokesman confirmed that they had written to inform the Opel Trust and General Motors of the EU's concerns. A copy of the letter was sent to the commission, which oversees EU competition rules.

"The ball is now in the court of the companies," and of the German state, which still has to provide details of exactly how its offer to underwrite the Magna deal with 4.5 billion euros (6.6 billion dollars) in loans and credit guarantees would work, Todd said.

The German government said there was no cause for concern, since the Opel deal was based on purely economic considerations.

"There is no reason to doubt the decisions made to date," government spokesman Ulrich Wilhelm said.

On Friday, EU Competition Commissioner Neelie Kroes revealed that she had written to Germany's Economics Minister Karl Theodor zu Guttenberg questioning the legality of the takeover sweetener.

"There are significant indications that aid promised by the German Government to New Opel was subject to the precondition that a specific bidder, Magna/Sberbank, was selected to acquire a majority of the shares in New Opel," a commission statement said.

"Such a precondition for the aid would be incompatible with (EU) state aid and internal market rules," the statement said.

Guttenberg on Friday said that the German government was "on a very solid path" with its plan.(dpa)