Special Report: Global Financial Crisis

    by Xinhua writer Yang Lei

    NEW YORK, Dec. 24 (Xinhua) -- When the White House finally handed out to the Detroit carmakers a long-awaited lifeline last Friday, it seemed to have triggered or at least fueled a wave of auto industry bailouts around the world.

    While many cheer the move as a timely rescue for the victims of global economic recession, many others have raised the acute question: Will this really work or will it make things even worse?

    BAILOUT WAVE

    Just one day after U.S. President George W. Bush announced a 17.4-billion-dollar emergency loan to Detroit's automakers, the Canadian government decided to provide around 3.3 billion U.S. dollars in aid to keep ailing automakers in the country afloat while they restructure. The so-called American auto Big Three, namely General Motors (GM), Ford and Chrysler, again became the major beneficiaries of the Canadian package.

    Across the Atlantic, the American move has been closely watched. European automakers are seeking 40 billion euros (52 billion U.S. dollars) in loans from the European Investment Bank, ostensibly tohelp develop cleaner cars.

    Earlier this month, France provided 1.5 billion euros (2 billion dollars) in aid to its struggling automobile industry. French President Nicolas Sarkozy said on Tuesday that there is another new plan coming out by the end of next month.

    In Germany, Chancellor Angela Merkel said her government would soon make a decision on the loan guarantees requested by GM Europe officials.

    In Britain, the government is reportedly in talks with the Tatagroup, the Indian owner of Jaguar Land Rover, about a government rescue package up to 1 billion pounds (1.5 billion dollars).

    Sweden, home of Ford's Volvo division and GM's Saab division, has passed a 3.6-billion-dollar aid package to prevent a collapse of its auto industry.

    There are other measures apart from an infusion of public fund. The Japanese government weighs on the option of depreciating its currency as a strengthened yen has raised cost for Japanese carmakers.

    Meanwhile, in a bid to boost domestic car industry, the Republic of Korea slashed an auto consumption tax by one third, and Russia imposed more duties and taxes on imported cars. In addition, Russian state companies will be directed to stop buying foreign cars.

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