David Prosser: Hoist on our own petard?

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The Independent Online

Outlook Good news then for Vauxhall workers, for whom Lord Mandelson's Department of Business appears to have secured vital concessions on jobs and production from Magna, the recommended bidder for their GM Europe parent company.

Before we get too carried away, however, it's worth remembering that the Magna deal is the subject of an ongoing investigation by Neelie Kroes, the European Union's competition commissioner. Ms Kroes is looking at whether the Germans are breaching state aid rules by offering Magna huge loan guarantees in return for assurances on domestic jobs that might adversely affect workers in other EU countries.

Those rules apply as much to the UK as Germany, of course. And if fewer jobs are going here, does that mean GM Europe's other European operations, particularly in Spain and Belgium, where unions have so far failed to reach agreements with Magna, will now suffer bigger losses? If so, Ms Kroes will have something to say about the loan guarantees the UK is offering, which are small compared to the German pledges, but still significant at around £400m. That's the trouble with the law – you can't use it only when it suits you to do so.

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