Further to its findings on September and October’s emergency action, this fresh and indepth investigation into the Newcastle-based lender will look into the governmental measures taken to support the restructuring of the bank, under EC Treaty rules.
The EC has ruled that all previous rescue aid measures may remain in place during this examination, however said that it was requesting further information from the government as it believed not all the facts had been communicated across.
Competition commissioner Neelie Kroes said: “The Commission needs to open a formal investigation into UK measures to restructure Northern Rock 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.”
The announcement follows similar EC investigations into the provision of state aid for IKB and Sachsen LB in Germany.
The EC is inviting third party comment as to whether the plan’s proposals for avoiding undue distortions of competition are adequate.
Findings are to be published in due course.
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