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EU to probe into French aid to Peugeot Citroen hybrid diesel car

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uropean Union regulators on Tuesday extended a probe into 96 million euros ($140 million) that France plans to grant PSA Peugeot-Citroen SA to develop a hybrid diesel car.

The European Commission wants to make sure that the aid does not break EU rules on state subsidies. ``The Commission has doubts whether Peugeot-Citroen and its partners really need this aid to produce less-polluting cars,'' the EU's executive body said in a statement.

France plans to grant the money to Europe's second-biggest car maker and 16 partners as part of total research and development costs of 470 million euros ($685 million) to develop the low-fuel vehicle.

``The Commission strongly supports the development of more environmentally friendly cars,'' said EU Competition Commissioner Neelie Kroes. ``However, we have to ensure that the aid is not spent on R&D that would have been carried out by Peugeot-Citroen in any event, or which its competitors may carry out without state aid.''

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EU to probe into French aid to Peugeot Citroen hybrid diesel car
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