EU Approves Spain’s Auto Loan Program

European Union regulators on Monday cleared Spain to give low-interest loans to companies that make fuel-efficient cars or car parts.

BRUSSELS (AP) -- European Union regulators on Monday cleared Spain to give low-interest loans to companies that make fuel-efficient cars or car parts.

The European Commission said it would approve the program because the financial crisis could risk the auto industry's investments in environmentally friendly cars.

Under the plan, the Spanish government will give two-year loans that charge half the normal interest rate to small and medium-sized businesses and three-quarters of the normal rate to large companies.

The loans will only be available this year and can only go to companies that were not in financial trouble before the peak of the credit crisis last autumn.

The EU must examine large state subsidies to companies to make sure that government help does not trigger competition problems by giving them an unfair advantage over rivals.

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