Lloyds Banking Group and Royal Bank of Scotland should not count on securing softer bailout penalties, the EU's top competition enforcer has warned, as he expressed confidence the banks would meet Brussels deadlines for forced sell-offs.
Following speculation that the state-backed banks might attempt to revisit the sanctions imposed for accepting public money, Joaquín Almunia, the EU’s competition commissioner, said he had “no fear” the commitments would not be met on time.
Compared with other bailout deals, Mr Almunia says Brussels gave the UK banks relatively long periods of about four years to make the disposals, which are designed to repay taxpayers and eliminate competitive advantage from state aid.
“We know that they have encountered some practical difficulties”, Mr Almunia told the Financial Times. “But the deadlines in both cases were longer than usual because of the huge size of the restructuring in both cases. We know they are discussing how to implement these commitments but so far I have not received any sign that they can’t comply with final deadlines.”
Mr Almunia’s intervention was partly intended to remove any doubts over Brussels’ resolve in enforcing the terms of bank bailouts, which some European banks have renegotiated after being unable to meet requirements.
Brussels does adjust conditions on bailout packages – such as with Commerzbank, KBC and ING – but the European Commission insists banks propose alternatives that are equivalent or stricter in competition terms.
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