France steps in to prop up car makers

France has become the first country to provide credit guarantees to the financing arms of its car makers, with a 779 million (711 million) payment to be split between Renault and Peugeot.

As part of the deal brokered by President Nicolas Sarkozy, the companies have promised not to move jobs abroad or to close factories.

The car industry employs 10% of the nation's workforce, and there have been fears that the dramatic drop in car sales will lead to cuts in production and mass redundancies.

Meanwhile, the US Government is close to agreeing a $40 billion (26 billion) bail-out for Chrysler, Ford and General Motors.

Both Chrysler and GM have admitted they don't have enough money to survive beyond 2008.