Europe's Jolly Green Auto Loans

THE WALL STREET JOURNAL EUROPE

European taxpayers already have a meaty hunk of bank bailouts to swallow. Now they're getting something green on their plates as well.
Just weeks after EU lawmakers passed strict new carbon-emission regulations despite warnings that they would cost auto makers dearly, Brussels called Wednesday for €40 billion in loans to the industry so that it can comply with the new rules. The EU taketh away, the EU giveth.
Brussels describes the loans from the European Investment Bank as being necessitated by the financial crisis. The looming recession will no doubt hurt auto sales in Europe, which fell further than expected during the third quarter.
But the freezing of credit markets and stream of banking failures were already well under way when the European Parliament voted in late September to force auto emissions lower by 18% within just four years. MEPs knew about the economic conditions, but nonetheless rejected proposed compromises to spread out the reductions over more time and lessen the fines for noncompliance. It's also devious, even by political standards, to approve an obviously expensive regulation and then, a month later, to provide the funding for it -- all the while acting as if the two moves are unrelated.
In their more honest moments, eurocrats acknowledge that they're following America's lead here. Washington has guaranteed $25 billion, or about €20 billion, in loans to the Big Three U.S. auto makers so that they can meet new fuel-economy standards passed last year, and Barack Obama wants to give them $25 billion more.
It wasn't so long ago that the Bush Administration sued Europe at the World Trade Organization for its soft loans to Airbus; now it's setting the trend in corporate handouts. The U.S. used to be the only side of the Atlantic willing to try to stop these kinds of subsidies, which Europe is only too happy to grant.
If Mr. Obama wins next Tuesday, expect a subsidy synergy between Europe and America as each pushes the other to greater heights -- or should we say depths -- of public largesse. The main effect will be to increase governmental influence over the industrial sector at the expense of taxpayers on both sides of the pond.