WASHINGTON, Dec 20: President George W. Bush defended on Saturday his decision to give financial aid to struggling US automakers, arguing that their uncontrolled bankruptcy could plunge the United States into a deeper recession.

“The actions I’m taking represent a step that we all wish were not necessary,” Bush said in his weekly radio address. “But given the situation, it is the most effective and responsible way to address this challenge facing our nation.”

On Friday, Bush unveiled a $13.4 billion rescue loan for the automakers, but demanded tough reforms in return in a move aimed at staving off a new economic calamity. General Motors and Chrysler, facing a threat of imminent bankruptcy that could create economic chaos and throw millions out of work across the country, agreed to the terms and will get the loans starting December 29.

GM will get $9.4 billion in two installments through mid-January and Chrysler up to $4 billion this month, officials said.

Ford said it would not be part of the loan programme, which could include an additional $4 billion from February for GM pending congressional action.

The funds will come from the Treasury’s $700 billion Troubled Asset Relief Programme (TARP) approved in October to bail out struggling financial institutions.—AFP