Jan. 9 (Bloomberg) -- General Motors Corp.’s Opel unit has been promised conditional bailout guarantees of as much as 1.8 billion euros ($2.5 billion) by the German government, more than the initial request made in November, a state official said.

“We have adopted a positive decision,” said Joachim Winkler, a spokesman for the Economy Ministry of Rhineland- Palatinate, one of four German states in which Opel has plants. Ruesselsheim, Germany-based Adam Opel GmbH initially asked for “somewhat more than” 1 billion euros in government credit guarantees, GM’s Europe chief Carl-Peter Forster said Nov. 17.

Opel still has to clarify its request for aid in talks scheduled for Jan. 13 with the German Economy Ministry and the four states, Winkler said. “Opel now has to deliver and provide evidence on three or four more points,” he said late yesterday by phone.

German readiness to back Opel comes as Chancellor Angela Merkel’s government draws up an economic stimulus package of as much as 50 billion euros, the second in two months, to help lift Europe’s largest economy out of what forecasters say may be the worst recession since World War II. Coalition leaders meet in Berlin Jan. 12 to complete the package. Merkel is also mulling a 100 billion-euro fund to help companies struggling to obtain loans on top of a 480 billion-euro rescue plan for banks.

‘Unprecedented’ Challenges

“We are facing an unprecedented set of economic challenges due to the global economic crisis,” GM’s Forster said in a statement on the company’s 2008 sales results, published today.

Opel, which employs 26,000 workers in Germany, still has to prove that state-backed loans would be confined to its German businesses, Winkler said. The government won’t approve guarantees if loans are channeled to its U.S. parent GM. Opel also needs to specify the research projects it intends to spend possible loans on, he said.

Opel spokesman Joerg Schrott declined to comment on the Jan. 13 talks, saying only that negotiations with the federal and state governments “are making good progress.” German Economy Ministry spokesman Steffen Moritz didn’t immediately return calls for comment.

German state guarantees for Opel remain indispensable even after GM was pledged as much as $13.4 billion in U.S. loans to pay bills, according to an official of the state government of Hesse who spoke on condition of anonymity. None of the U.S. funds would likely be channeled into European operations, he said. Opel employs 18,000 staff in Hesse, where its biggest German plant is located.

GM said today its European division’s sales fell 14 percent to 150,893 cars in December as all its brands, including Opel, posted declines in the region. Full-year sales in Europe dropped 6.5 percent to 2.04 million vehicles.

Merkel said after November’s talks that the government would study a plea for funding and make a decision by Christmas on whether to provide financial support. Opel is a “special case” because of its ties to GM in the U.S., she said then.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net.

Last Updated: January 9, 2009 05:57 EST