French carmaker Renault is to shift some car production back to France after the guarantee of state aid.
French carmaker Renault is to shift some car production back to France after the guarantee of state aid.
The company will bring one car production line to the Paris suburbs from Slovenia and create 400 jobs, a French government minister said.
The company will bring one car production line to the Paris suburbs from Slovenia and create 400 jobs, a French government minister said.
But the European Commission has demanded clarification about the plan, saying it may be protectionist.
But the European Commission has demanded clarification about the plan, saying it may be protectionist.
France last month agreed to give Renault and Peugeot Citroen loans in return for keeping French plants open.
France last month agreed to give Renault and Peugeot Citroen loans in return for keeping French plants open.
Luc Chatel, a junior minister for industry, announced Renault's decision in a local radio interview.
Luc Chatel, a junior minister for industry, announced Renault's decision in a local radio interview.
European concerns
European concerns
EU competition commissioner Neelie Kroes told the BBC she was highly surprised and was seeking urgent clarifications.
EU competition commissioner Neelie Kroes told the BBC she was highly surprised and was seeking urgent clarifications.
Ms Kroes said she received a pledge from Mr Chatel just a few weeks ago that an $8bn state bail-out for car firms would not be linked to moving jobs to France.
Ms Kroes said she received a pledge from Mr Chatel just a few weeks ago that the 6.5bn euros state bail-out for car firms would not be linked to moving jobs to France.
If the aid proves to be conditional, Mrs Kroes said, it is illegal under EU rules and should be paid back.
If the aid proves to be conditional, Ms Kroes said, it is illegal under EU rules and should be paid back.
BBC correspondent, Oana Lungescu, said the clash comes at a pivotal point.
BBC correspondent, Oana Lungescu, said the clash comes at a pivotal point.
"This row couldn't have come at a worse moment for the EU, just as leaders meeting in Brussels are calling on the US and others to tackle the global crisis by avoiding all forms of protectionism," she said.
"This row couldn't have come at a worse moment for the EU, just as leaders meeting in Brussels are calling on the US and others to tackle the global crisis by avoiding all forms of protectionism," she said.
The French plan to offer both Renault and Peugeot Citroen 3bn euros ($4bn; £2.8bn) sparked a row over protectionism after President Nicolas Sarkozy suggested that the money should not be used to rescue French-owned factories in Eastern Europe.
The French plan to offer both Renault and Peugeot Citroen 3bn euros ($4bn; £2.8bn) sparked a row over protectionism after President Nicolas Sarkozy suggested that the money should not be used to rescue French-owned factories in Eastern Europe.
A Renault spokeswoman told the BBC that no jobs would be lost in Slovenia when production is moved to the Flins factory, near Paris.
A Renault spokeswoman told the BBC that no jobs would be lost in Slovenia when production is moved to the Flins factory, near Paris.
Carmakers in Europe and beyond have been hit hard by the economic downturn.
Carmakers in Europe and beyond have been hit hard by the economic downturn.
Renault last month reported a steep fall in profits and abandoned its targets for 2009, blaming an economic crisis "of massive proportions". Sales in Europe were down more than 7%, it said.
Renault last month reported a steep fall in profits and abandoned its targets for 2009, blaming an economic crisis "of massive proportions". Sales in Europe were down more than 7%, it said.
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