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northern rock support as state aid November 19, 2007

Posted by Bradley in : Uncategorized , trackback

The UK Treasury announced a set of Principles for Assessing Proposals for the future of Northern Rock. The notes to the press release recognise that existing arrangements fior supporting Northern Rock constitute State Aid (which is regulated by the EU Commission) and that any proposals about the future would need to take account of State Aid rules:

State Aid rules would limit any ongoing public sector involvement even if it otherwise met the Tripartite Authorities’ objectives. Any ongoing State Aid measures beyond those currently in the course of notification to the European Commission would represent a potential risk to value and execution, because the European Commission may impose adverse conditions and may take additional time to approve such State Aid.
Proposals will be assessed against this backdrop, and should demonstrate how they have taken account of the State Aid rules in their development. All other things being equal, any proposal will be viewed favourably in so far as it is not conditional upon European Commission approval of further aid measures.

Meanwhile the Commission has an ongoing consultation on Rescue and Restructuring Aid Guidelines with a deadline for comments of 30 November. The Commission’s recent notice, Towards an effective implementation of Commission decisions ordering Member States to recover unlawful and incompatible State aid notes that the Commission has in recent years taken a stronger stance on State Aid, and that it is concerned to ensure the repayment of unlawful State Aid.

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