Tuesday, 22 January 2008
Will the EU block the government bail out of Northern Rock?
The markets have spoken and Northern Rock is on the up. All is well as Gordon denies he has been doing deals with Branson whilst ego-tripping around the world.
Today though I present the links to the key European laws on state aid which may come into play. no doubt Goldman Sachs has had its legal team pouring over this and they have come to the conclusion that the Government is on safe ground.
One of the downsides to expensive lawyers is that they often tell you what you want to hear and there are always two sides to every case.
My view is that the Government could well face an investigation under the terms of article 81/1 2.2.2. The Commission could argue that the bonds issued give the company an extra benefit in the market and have prevented administration. Any views from lawyers reading this?
Somehow I don't think the formidable Neelie Kroes is going to make life easy for Badger and Gordon.
Now they just have to get the bonds away in this market....
Posted by CityUnslicker