Stockholm  - The Swedish government Thursday moved to help Volvo Cars, the troubled Swedish subsidiary of US carmaker Ford.

The government said it has given the Swedish National Debt Office the task of negotiating the terms for a 5-billion-kronor (525 million dollars) credit guarantee to Volvo Cars and Ford.

Volvo Cars and Ford hope to secure a loan from the European Investment Bank (EIB) as part of moves to make more ecologically friendly vehicles, including developing more fuel-efficient engines, the government said after its regular cabinet meeting.

Ford on Thursday reported it lost 5.9 billion dollars in the final quarter of 2008 while Volvo Cars posted a pre-tax loss of 736 million dollars for the quarter.

Ford has owned Volvo Cars for 10 years and has said it wants to sell the loss-making Swedish subsidiary.

In December, the Swedish government launched a 28-billion-kronor (3.4-billion-dollar) package aimed at securing the long-term viability of Swedish-based vehicle makers.

The package included credit guarantees for loans from the EIB. dpa