The Government's control of Northern Rock has taken another couple of bad hits today. Firstly, as it runs out of money very quickly and its loan impairments increase, it has been forced to stop paying bondholders, where it can. In a private company, this would be the end more or less, of course, the Rock is well past this stage. It does not help to set the business up for the quick sale that the Government want before the election.
Then the remaining Mutual businesses in the Country have lodged a submission with the EU, saying that the Government's current plan for the Northern Rock business going forward (a good bank/bad bank model - with the bad being taxpayer owned) is anti-competitive. They insist the Rock should have more lending restrictions to prevent market domination.
Oh dear, what a mess. This whole fiasco is going to cost the taxpayer billions of pounds and if the EU reject the Government plan then it will be back to square one. If only there was a solution someone could think of?