Germany's Economics Minister warned on Tuesday a decision over state aid for Opel, affecting thousands of jobs, could take until early June, as a state rescue fund failed to make a decision on a recommendation on loan guarantees.

A definitive decision will definitely not be able to be taken today, Rainer Bruederle told reporters in Brussels, dashing hopes that the future of the General Motors GM.UL unit may finally be resolved. He later said this decision would not come until late May or early June and he gave no further details.

Loss-making Opel is seeking state aid for its turnaround plan, but GM's strong balance sheet and its return to profitability from bankruptcy in just 12 months is undermining the arguments for state aid from its subsidiary.

GM only wants to contribute half of the 3.7 billion euros ($4.52 billion) Opel requires in total funding, arguing flatly Opel is a problem for European taxpayers since it is a European carmaker.

Officials claim Opel is not in any acute danger of collapse, so there is no rush to make a decision -- despite 18 months elapsing since the first aid request by Opel was made.

Further delays have raised the suspicion that Berlin is drawing out a final decision long enough until it is blatantly clear to all involved that the answer will be no.

While all other countries in Europe affected have long since decided (in favor of aid) for Opel, the German government economic policy is still spinning in circles, the regional union boss from IG Metall Frankfurt, Armin Schild, told Reuters.

He warned that the federal government in Berlin risked complete isolation both in Europe and in Germany, after regional states like Thuringia as well as other governments such as the UK, Spain and Poland have decided to provide aid.

REAL ECONOMY

The dithering and the haggling of Bruederle is unbearable, said Dietmar Muscheid, the head of German union umbrella federation DGB in Rhineland-Palatinate, home to Opel's Kaiserslautern plant that supports 3,300 jobs in the state.

Business experts at Germany's rescue fund began on Tuesday to discuss whether taxpayers should backstop loans to Opel worth about 1.3 billion euros ($1.6 billion) that would finance some 8,300 upcoming job cuts.

A final ruling on aid is likely to be made by senior members of the German government, in conjunction with the four states home to Opel plants. As many as 120,000 jobs in Germany alone will be affected by any decision.

Thuringia's state economics minister, Matthias Machnig, who represents voters working in the Opel's Corsa plant in Eisenach, called on Berlin to act.

Bailout packages in the billions for Greece and the financial sector are agreed for in a matter of days, while decisions affecting jobs in the real economy are repeatedly postponed, he said.

The state, which lies just beyond the border in the structurally weak former East Germany, has promised to offer 27.2 million euros in guarantees to the displeasure of the three other states that wanted to continue to act strictly in unison to maximize their political influence.

(Additional reporting by Rene Wagner and Paul Carrel in Berlin; Editing by Sharon Lindores)

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