French Auto Aid Prompts EU Competition Inquiry

France unveiled a plan on Monday to give €6 billion ($7.8 billion) in low-interest loans to Renault SA and PSA Peugeot-Citroën in exchange for promises that they won't close factories in France or lay off workers for the duration of the loans. The government also will offer €500 million in loans to auto-sector firms with operations in France.

The bailout is part of President Nicolas Sarkozy's effort to protect jobs in France as the economic downturn deepens.

European Commissioner for Competition Neelie Kroes wrote to the French government Tuesday seeking clarification on the package, citing concerns about the companies' pledge to protect employment in France, her spokesman said. A review of the French auto bailout by the European Commission, the EU's governing body, could take months.