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Bank Bail-out May Breach Eu Competition Laws

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The European Commission has requested information from the British authorities over the government bail-out of Northern Rock, concerned that it could violate EU state aid laws if support leads to distortion of the banking market.

http://www.telegraph.co.uk/money/main.jhtm.../19/cneu119.xml

Charlie McCreevy, the single market commissioner, said the issue must be tackled urgently, but he cautioned yesterday against easy bail-outs. "In a long benign lending cycle, which is what we have just had, lenders always get a bit lax. The worst reaction of all is an instantaneous reaction. Ninety-nine out of a hundred times that's the wrong approach," he said

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Bank Bail-out May Breach Eu Competition Laws

So it may be the EU that contronts this Govt, since no one else has.

Excellent! At least someone is.

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EU officials stressed that the competition watchdog had not launched a full-scale probe, and so far appeared satisfied that London had acted within reasonable bounds.
A spokesman for Neelie Kroes, the competition commissioner, said the ban on government subsidies to banks could be waived in exceptional circumstances of "systemic risk", but not on a long-term basis. "We're monitoring the situation," he said.

Non story.

Hmmm. EU pokes stick at GB, quiet rumble of EU constitution vote. Quiet dropping of any criticism.

Not going to happen. I'm sure the EU would be really happy to see the UK banking system and therefore economy collapse and with it the funds that pays for the EU Jets, cars and flunkies.

If you are a competition minister you have to raise your head from the trough now and again to grunt and justify your position. A little bluff and bluster as they jostle for the next feed.

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Should NR be allowed to advertise its real or imagined competitive advantage ( ie govt backing ) in the newspapers ? If only 'existing customers' at the time of the Darling statement on 17-Sept are covered by guarantee, should that not be made clear to potential new or returning customers ?

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