Relaxation over EU state aid ruled out

Europe's state aid and fair competition rules will not be relaxed despite the scale of the financial crisis, the European Commission said today.

As the number of national bail-outs of banks and finance houses piled up for approval by Brussels, the Commission's chief spokesman said the current rules were part of the solution, and had always been designed to allow for flexibility in "exceptional circumstances".

Johannes Laitenberger insisted that the rush of announcements of unilateral government bail-outs over the weekend did not break the spirit of a "closer financial co-operation" deal at a weekend summit in Paris between Britain, France, Germany and Italy.

German Chancellor Angela Merkel signed up to the deal, but within hours had announced back in Berlin that she was guaranteeing all private German bank accounts to restore consumer confidence.

But Mr Laitenberger said today: "The measures taken by different member states are in the spirit of a co-ordinated approach.

"Let me be clear: These (EU state aid ) rules are not being changed, because it is completely false to say they stand in the way of a sensible, reasonable, single market solution. These rules are part of that solution, not part of the problem.

"They have been designed all along to be flexible in exceptional circumstances, and these are exceptional circumstances - so there is no need for a phantom discussion about changing the rules".

The Commission confirmed that Germany did notify Brussels before announcing the move - but Ireland has yet to notify the EU competition watchdog about its own, more wide-ranging, two-year guarantee scheme protecting all depositors in the country's six largest banks.

A spokesman for EU Competition Commissioner Neelie Kroes said all the national moves to prop up banks would need EU approval under the rules, but the German scheme - guaranteeing funds held by "retail" depositors only - was less sweeping than the Irish scheme.

"Precise details of the Irish scheme are still being worked out and we still have not been formally notified about them, but the Irish are looking at going beyond guaranteeing retail deposits and including all commercial funds too. We will have to look at all of that, and we will be looking at the other schemes in other member states too."

If the Commission decides that any of the bail-outs amount to unfair "state aid", officials could demand the withdrawal of the plans.

But in a climate of continuing financial turmoil, the Commission is reluctant to take any action which could further undermine confidence in the banking system in Europe.

ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Business Development Director - Interior Design

£80000 - £100000 per annum + competitive + bonus + benefits: Sauce Recruitment...

Sales Director, Media Sponsorship

£60000 - £65000 per annum: Sauce Recruitment: A globally successful media and ...

Head of Affiliate Sales for Emerging Markets

competitive + benefits: Sauce Recruitment: Are you looking for your next role ...

Brand Engagement Manager - TV

£45000 - £55000 per annum: Sauce Recruitment: This is your chance to join a gl...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits