EU competition regulators on Monday approved a 380-million-euro German bridging loan to Thomas Cook’s German airline Condor, saying the measure would ensure the continuation of air transport services.
Condor ran into a liquidity problem after its parent company and the world’s oldest travel firm Thomas Cook collapsed last month.
In other words, the UK government need not have let Thomas Cook fail. It could have guaranteed a loan that meant it did not have to fall to ABTA, which is guaranteed by the UK government, to spend more than the value of the required loan guarantee to repatriate vast numbers of people who could have instead continued their holidays uninterrupted whilst an orderly reorganisation of Thomas Cook could have been arranged. And EU law permitted that.
It’s often said that the EU obstructs commercial matters to promote competition: the reality is it very clearly takes reality into account. This is a case in point. It’s the UK government and free-market ideologues who promote the idea that the EU is a problem. Very often it is not. And the left should take note.
That a parent company goes bust does not mean that the subsidiary is also bust. That T Cook went bust does not mean that all subsidiaries of T Cook are bust.
Further, that Condor is perhaps viable but that T Cook airline is not are different issues. Whether or not T Cook could have been bailed out by the UK government depends upon whether T Cook was perhaps viable. With that £3 billion hole perhaps not.
Whether or not T Cook airline could have been subsidised depends upon whether T Cook airline was perhaps viable or not.
That a possibly viable subsidiary got support doesn’t mean that a possibly not viable one would be legally able to have the same.
But then, you know, Snippa, accounting, the law……