Allister questions excuse of 'state aid' in PMS saga

13 October 2009

Former MEP and TUV Leader Jim Allister QC has questioned the recent raising of ‘state aid’ obstacles by the Government in the on-going efforts to resolve the Presyterian Mutual Society crisis.

“Some months ago I interrogated the EU Commission on the PMS issue through a number of questions. In one such answer Commissioner McCreevy said this:-

“Community law does not prevent a Member State from establishing a protection scheme that goes beyond Community law to reflect its financial sector, for instance for investments in mutual societies. It is, therefore, the responsibility of the United Kingdom to decide whether and how possible consequences for Presbyterian shareholders could be mitigated and in how far national legislation should protect shareholders of institutions like Presbyterian.” http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+P-2008-6612+0+DOC+XML+V0//EN&language=EN

“The Commission certainly made no mention of state aid rules as a problem

“In any event, I would not see ‘state aid’ being a major obstacle considering the 3 trillion of aid already given and approved to banks throughout the EU. PMS is a very small drop in the ocean. Moreover, in truth, it is hard to see any distortion of the internal market or effect on neighbouring markets by ‘bailing out’ PMS. So, I think state aid is largely a red herring.

“I remain of the view that the route to a resolution lies in hanging a significant portion of responsibility on the neglect of DETI etc in permitting unregulated activities by virtue of the absence of adequate regulation. DETI’s self-serving failure to admit any failings on its part is not helping.”

General