German mobile operator MobilCom’s future is hanging in the balance. The European Commission has stated that it should have final say over whether the company is allowed to receive the E400 million aid that the German government has promised it.
Disaster stuck for MobilCom after beleaguered shareholder France Telecom pulled its funding. However, the German government agreed to help the company out by organizing a deal with two state banks from MobilCom’s home state and temporarily halting the loss of up to 5,500 jobs.
The EC is classing the money as a state rescue – so it will make the final decision on whether it’s permitted. The German government has rebutted these comments, declaring that the money was no more than a bank credit.
Either way, there is likely to be respite for MobilCom: given the rules, it looks unlikely that Brussels will be able to challenge this loan.