EC rules out swift decision on Northern Rock aid plan

The European Commission today ruled out any swift approval of the UK government’s plans for a £3bn (€3.5bn) cash injection for Northern Rock.

A Commission spokesman denied claims that a decision was likely within weeks, following breakfast talks in Luxembourg yesterday between British Chancellor Alastair Darling and EU Competition Commissioner Neelie Kroes, who approves or rejects government aid to industry.

She cleared emergency government aid for the nationalised British bank as the economic crisis hit, and must now rule on whether the UK government’s longer-term plans to prop up the bank breach EU fair competition rules.

And until she delivers her verdict, the government cannot act on a range of options for Northern Rock, including floating the bank on the stock market or selling it.

“The Commission will adopt a decision as soon as possible, but this will not be before the summer because of procedural constraints” said a spokesman for Ms Kroes.

Mr Darling was in Luxembourg yesterday for a meeting of EU finance ministers, and used the occasion to have private talks with Ms Kroes and press the Competition Commissioner to speed up her announcement.

But she dashed hopes of a swift verdict.