FDP sees risk Germany shoulders full Opel burden

Germany could end up shouldering the entire burden of aid for Opel because Britain and Spain remain reluctant to support the planned sale of the carmaker to Canada's Magna, a Free Democrat (FDP) politician said.

The FDP is in the midst of coalition negotiations with Chancellor Angela Merkel's conservatives and expected to become part of a new center-right government next month.

The party has been skeptical of the plan, orchestrated by Merkel's outgoing grand coalition government, to provide up to 4.5 billion euros ($6.6 billion) in loan guarantees to Opel under the Russian-backed Magna deal.

Asked by reporters in Berlin whether Germany could end up providing the full amount, FDP deputy head Rainer Bruederle said: There is that danger, because there is no agreement with Great Britain and Spain.

He played down the prospects of the FDP stopping the Magna deal, however, saying it was impossible for his party to reject pledges made by the current government.

This simply isn't possible anymore. Contracts were signed and promises were made. What we need to do now is ensure that the disappointment among Opel workers ... does not grow too large, Bruederle said.

Opel, which is being sold by its U.S. parent General Motors , has about 50,000 workers in plants across Europe, with half in Germany and big workforces in Belgium, Britain and Spain.

Germany has been trying to convince these countries to assume a portion of the 4.5 billion euros in guarantees, but they have resisted, in part because they believe Opel plants in Germany will benefit more from the Magna deal.

German Economy Minister Karl-Theodor zu Guttenberg said on Monday he was optimistic that the other countries would end up contributing.

DIFFICULT SPOT

But Berlin appears to have landed in a difficult spot. If other countries withhold their support, Merkel's government will be confronted with an unsavory choice: subsidizing Opel plants outside of Germany or letting the deal collapse altogether.

Even if Berlin agrees to shoulder the entire burden, there is a risk of the European Commission blocking the deal.

Opel labor leader Klaus Franz told Reuters Monday that he expected GM to sign the contract to sell a 55 percent stake in Opel to the Magna-led consortium this week.

Labor has said it could contribute annual savings of 265 million euros, but where the 10,500 planned job cuts could fall has not been finalized.

We are on the home stretch but there a few more points to clear up, Franz said. I expect the contract to be signed in the course of this week.

Magna and its Russian backer Sberbank have promised to inject 500 million euros into Opel, which they want to use to make an aggressive push into the Russian market.

They have committed to keeping German plants running, but Opel's Antwerp plant in Belgium and the British site of sister brand Vauxhall in Luton are seen at risk.

The negotiating parties have said they aim to close the deal by the end of November.

(Reporting by Gernot Heller and Jan Schwartz; Writing by Noah Barkin and Michael Shields; editing by John Stonestreet)

($1 = 0.6795 euro)