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Was the UK government right to offer a loan guarantee to GM Europe?

The fallout from the UK government's £270 million loan guarantee to GM Europe continues to grow with some experts concerned at the timing of the move. As we approach the next general election there are concerns we are entering an MG Rover type scenario although in reality it is wrong to compare the two operations even at their lowest point. So was the UK government right to guarantee a £270 million loan to GM Europe?

The bottom line is that the UK government is here to protect jobs in the UK and with GM Europe looking for assistance in local markets in Europe there is no way the UK government will be the only one to offer financial assistance. The German authorities have stalled somewhat with regards to their assistance for GM Europe but there is friction from the recent near sale of the operation and the stance which the German authorities took against General Motors, the parent company in the US.

Whether the UK government should have been more forthcoming with regards to similar requests from other operations in the UK is open to debate but ultimately UK taxpayer money should be invested in sustainable businesses to secure and attract more jobs in the future.

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