French in car industry bail-out

France's car industry is entering into a bail-out agreement with its government in a move that signals European rescue packages are not just exclusive to the banking sector.

Industry minister Luc Chatel said that Paris is asking for an equity stake before funding is made available.

He told leading French newspaper Le Figaro: "The situation is serious. We're looking at every possibility, but the plan will not be a gift. Manufacturers will have to preserve their industrial sites in France.

"We're not a government that gives help while allowing factories to be closed."

The full rescue package involved in the scheme, open to foreign companies with French plants, may total 10 billion euro (£9.02 billion).

According to Mr Chatel, car industry employees make up about 10% of the French workforce -- including subcontractors -- or 2.5 million jobs.

It is understood that the government in Paris is determined to prevent more jobs going abroad as car makers shift plants to Eastern Europe. The state already holds a 15% stake in car firm Renault.

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