ANNOUNCEMENT 25 Jul 2012

In July 2012, the government of France announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising
Inception date: 25 Jul 2012 | Removal date: open ended
Still in force

Capital injection and equity stakes (including bailouts)

The Ministry of Productive Recovery has announced a rescue plan for the automobile industry and its suppliers, consisting of strengthening the existing incentives for acquiring environmentally friendly cars on the one hand and disposing of polluting ones on the other. The consumer incentive for electric cars will increase from EUR5,000 to EUR7,000, that for hybrids from EUR2,000 to EUR4,000. Higher taxes were to be imposed on larger cars that generate more carbon emissions. These measures are effective immediately and will apply until the end of 2012: an extension might be included in a new statute for 2013.
 
Twenty-five per cent of the government's car purchases will consist of electric and hybrid cars. Measures are taken to encourage electric car charging points throughout the country.
 
On the face of it, this measure appears to treat cars independent of where they were produced and by whom. Indeed, in August 2012 press reports indicated that registrations in France of German produced cars had risen, while the registrations of Renault and Peuguot Citroen fell. Still, commentators have noted that the incentives are targeted in exactly segment of the car market where French automobile producers have invested very heavily. Moreover, the increased taxes fall mainly on segments of the car market where German producers are market leaders in Europe. This measure may therefore be de jure non-discriminatory but de-facto discriminatory. Adding to this concern is the fact that the eligibility criteria for receiving the incentives have not been spelt out. 

 

AFFECTED SECTORS