David Davis
We picked this up on a hat tip from Christina Speight.
This is not unexpected, but the shoddy package Darling and Brown have put together could well come unstuck. Banks are already complaining that the state guarrantees given to Northern Rock give that company a substantial trading advantage.
Although it may offend euro-sceptic sensibilities this may be a case where the EU can save us from the excesses of our own profligate government.
Christina
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SKY NEWS 2.4.08
EU Probes Northern Rock Revamp Plans
Updated:10:38, Wednesday April 02, 2008
The EU Commission says it has begun an in-depth investigation into the UK’s restructuring plans for Northern Rock.
Bank was nationalised last month
It says it wants to look at potential distortion to the market - the probe will last several months.
Competition Commissioner Neelie Kroes said it was needed “to ensure legal certainty, notably in view of the large scale of the aid measures, the background of current conditions in financial markets and the risks of distortion of competition.”
Britain’s fifth-largest mortgage lender was nationalised last month but the Government needs EU approval for such action.
It was bailed out to the tune of some £24bn by the Bank of England.
UK taxpayers are now subsidising the bank in loans and guarantees to other lenders to the tune of about £55bn. It wants to pay the money back as soon as possible.
However, it admitted in its results statement that it expects to remain “significantly loss making” throughout this year.
The commission has already endorsed the rescue aid loans to the bank
It has also backed the action taken by the Government last December to bail it out.
However, such a rescue package is regarded as only temporary - the restructuring moves the commission is investigating are a separate matter.
Restructuring aid allows a government to inject capital into a company - but in return that company must shrink in size so that the cash it receives will not unfairly affect its competitors.
The commission acknowledged that the UK plan would reduce Northern Rock’s lending operations and the size of its balance sheet.
I think the point we want to begin making on here as Libertarians - and I know Sean Gabb agrees - is that although we DO view the EU as a problem extistentially, it is not any more the MAIN one.
If our current political masters and their emplaced Enemy Class did nothing more than enact EU Law (as they have to) and then went back to sleep as is the general case with their comrades on the Continent, life in the UK could remain quite tolerable and free of either the present gross State corruption, or much of the tyrannical aspects of it, or both.
We have to hope that the EU wil pull the current cosy “Northern Wreck” deal apart. It was as clear as mud that it was only held afloat and “rescued” because of the salariat-votes and new-Laborg-payroll-jobs in its Stalinist heartland of the North East.