The European Investment Bank (EIB) on Tuesday approved loans of 866 million euros (US$1.2 billion) to European-based auto makers for cars with lower carbon dioxide emissions, the bank said in a news release.

The sum adds to the 3.6 billion euros (US$4.8 billion) in loans the bank, the long-term lending arm of the European Union, has approved since last December for European car and truck makers.

The money is part of a 7-billion-euro (US$9.3 billion) loan package the Luxembourg-based bank is providing the automotive industry to aid Europe's recovery from the global financial crisis.

Additional loans, which will be submitted to the bank's board in May and June, would reach an even wider range of beneficiaries including component suppliers.

The European automobile sector, which employs about 12 million people, has been hit hard by the economic crisis as vehicle production fell by 28 percent in the final quarter of last year.

The European Commission called in November for an aid package of 5 billion euros (US$6.7 billion), including 4 billion (US$5.3) from the EIB, to help the European car industry develop cleaner vehicles to deal with the financial crisis and climate change.

Under a broad economic recovery package announced in December, the EIB is raising its total lending by 15 billion euros (US$20 billion) per year for both 2009 and 2010 compared to previous years.

The increase is directed at three main areas: helping small-and-medium sized enterprises and mid-cap firms, supporting Europe's convergence regions and contributing to the fight against climate change.

(Xinhua News Agency April 8, 2009)