GM Drops Opel Deal with Magna and Sberbank

The board of directors of General Motors has decided not to finish the deal for the sale of carmaker Opel to a consortium of the Canadian Magna and Russian Sberbank. The has been a subject of investigation by the European Commission for illegal state aid.

The European Commission has said that it is now ready to examine any revised state-aid package that might be offered by the German government in the light of GM’s surprise announcement.

The German government has claimed that the financial aid for Opel was not conditional. I fail to understand, then, the reaction of Jürgen Rüttgers, premier of North Rhine-Westphalia, who said: “General Motors’ behaviour shows the ugly face of turbo-capitalism. That is completely unacceptable.” Rainer Brüderle, Germany’s new economics minister, has also said: “The behaviour of General Motors towards Germany is totally unacceptable.”

To my humble opinion the wording of the German reaction is utterly unacceptable itself. The German government has said in writing to the European Commission that the €4.5bn of government aid for the deal was not dependent on Magna and Sberbank being the winner, and is available to all bidders.

Is it available to all bidders or is it not available or what?

 

Commission Moves Forward with Bulgarian Bar Act Case

The European Commission has decided to move forward with the Bulgarian Bar Act case and has sent a reasoned opinion saying that some provisions of Bulgarian legislation relating to lawyers constitute a violation of the freedom of establishment of lawyers and law firms in Bulgaria as enshrined in Article 43 EC and also infringe Directive 98/5/EC, which aims to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained.

German Aid to Opel Was Not, Well, Conditional

On Friday Competition Commissioner Neelie Kroes had written to the German Economy Minister, voicing doubts about Germany’s offer to provide 4.5 billion euros in financial aid for Opel as part of the deal with Canadian Magna and Russian Sberbank. As Euractiv points out, the German government said repeatedly it had a “clear preference” for the Magna bid as it offered Opel the most promising future and would protect German jobs.

Now Germany’s government has written a letter to GM and the Opel trust assuring them that the €4.5bn of government aid for the deal was not dependent on Magna and Sberbank being the winner, and was available to all bidders. Quite convincing.

Frankfurter Allgemeine Zeitung explains that arguments for the deal have nothing to do with Community competition law. But of course. Community competition law is a decoration we wear when the weather is appropriate.

The Economic and Financial Crisis – the EU Legal Perspective

A new, useful report by Prof. Sideek Mohamed Seyad provides a legal analysis of the global financial crisis from a European perspective.

According to Prof. Seyad, it is difficult to coordinate a common approach in an emergency situation under the EU legal system. One of the reasons is that the European Union has no competence to legislate in some areas, such as taxation. In other sectors, such as the cross-border provision of banking services, regulation is to a great extent handled at the national level.

The report says that in responding to the crisis, national interests began to override the broader goal of European integration as Member States adopted various measures to protect their own industries.

A general conclusion is that the future stability and unity of the EU would largely depend on the restoration of normalcy in the eastern part of its territory.

My Blog on Climate Change

I now participate in TH!NK2 Climate Change – a 3 month blogging competition with a focus on UN Climate Change Conference in Copenhagen (COP15) in December 2009.

You can check my posts on this topic here.

Neelie Kroes in Blunt Warning over Car Jobs

The EU commissioner on competition was quite blunt in her message to Member States on aid for car manufacturers:

“We cannot accept one government bribing companies in order to steal or end the jobs of another.”

Her comments come after the German government plan for restructuring car manufacturer Opel that includes 3 billion Euros in loan guarantees.

ECJ: On-Line Gambling Restrictions Are Justified

The Grand Chamber of European Court of Justice has ruled that some restrictions of on-line gambling by Member Sates are legitimate for the objective of combating fraud and crime

Trouble over Raw Materials Supply from China

The association of German industry BDI has warned that:

“Global, European and national restrictions to commodities are threatening the growth of German industry, which is vital to overcoming the current crisis.”

“We are steering towards a raw materials gap,” said Ulrich Grillo, chairman of the BDI commodities group and chief executive of German zinc producer Grillo-Werke.

BDI complains that China alone has restricted trade with raw materials and semi-finished products with some 373 export duties.

This complaint comes when there’s news about a draft report by China’s Ministry of Industry and Information Technology. The report has called for a total ban on foreign shipments of some rare metals, while introducing export quotas for other rare elements far bellow global needs.

Third Energy Package Published

The Third Energy legislative Package was proposed on 19 September 2007 by the EC in order to pursue the liberalization of the electricity and gas markets. Today it has been published in the Official Journal.

A new Agency for the Cooperation of Energy Regulators is created that will monitor the internal markets in electricity and natural gas, as well as the activities of national regulatory authorities.

A good analysis of the Third Energy Package is available by Wim Groenendijk from the University of Utrecht.

European Ombudsman Criticizes Intel Investigation

The Wall Street Journal reports that the European Ombudsman has criticized the conduct of the European Commission during the investigation against US chipmaker Intel. Mr. Diamandouros has said that the European Commission committed “maladministration” by not recording in the case file a formal account of an August 2006 meeting between commission investigators and a senior Dell Inc. executive who was providing evidence in the case.

The report says that the executive, who isn’t identified, is believed to have told investigators that Dell viewed the performance of Intel rival Advanced Micro DevicesInc. as “very poor.” That could imply that Dell chose Intel chips for technical reasons.