Industry ministers to endorse EU car rescue plans

European industry ministers are expected to endorse a comprehensive rescue package for the EU car industry, including financial incentives for scrapping old cars, when they meet in Brussels on Thursday.

Ministerial discussions will focus on actions to ensure both the long-term competitiveness of the industry and its short-term survival, according to a council background note. This includes debate on improving access to finance, focusing investments on innovative and clean technologies and encouraging renewal of the European car fleet.

Green transport group T&E warned that the expected endorsement of financial incentives to scrap old cars would "do little for the environment" and could "even be harmful". The German government currently offers €2,500 to new car buyers regardless of cars' CO2 emissions, the group said.

But industry commissioner Günter Verheugen has said future EU guidelines for scrapping schemes should be linked to the green performance of replacement vehicles. Meanwhile, the German subsidy is helping boost demand for smaller rather than larger cars, the German car industry association VDA reported on Tuesday.

Industry ministers will also review a Czech presidency progress report on better regulation. This is a core component of Europe's response to the economic and financial crisis. In January, the European commission proposed measures that could include changes to several key environmental laws.