As the Guardian notes, Thomas Cook executives face a grilling in parliament this morning.
In Germany there is a different story. There Reuters note:
Thomas Cook German airline wins EU okay for 380 million German loan
And they add:
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.
The European Commission said the loan will either have to be repaid after six months or Condor will have to be restructured to ensure its long-term viability.
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.
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So much for saying that the EU prevents members states from helping out the private sector.
More evidence of the lies perpetrated by Leave.
The state aid rules seem to operate on the basis that state aid which increases private profits such as the secret corporate bond buying program is fine. On the other hand state spending which reduces private profit in an area such as the railways is forbidden.
The cost of avoiding giving the £200 million guarantee to facilitate the takeover by Fosun from China is £100m for flying people home, £90 million for redundancy paymets from the National Insurance Fund, and £1 billion for reimbursing folk for holidays they had booked but not yet taken. Not baf for a weekend’s work that cost the government £1.2 billion and destroyed 9000 jobs. But the hedge funds made $250 million cashing in credit default swaps. Are they the same ones as fund Boris and Rees Mogg?
Yet another example of the way our witless (my word of the day) Westminster Government fails to look after UK interests and blames it’s feckless response on some nebulous EU rules it clearly doesn’t bother to understand.
“Fuck Business” said Boris. Well, that was a rare, true utterance of our Prime Minister’s attitude to his ‘beloved’ country.
He and his sycophantic shower of would-be toffs are considered to be electable ? God bless us all (said Tiny Tim).
yet another example of blame falsely attributed to the EU.
another example, “health and safety culture”, “nanny state regulations” etc etc.. I live in NL and there’s none of that here, it’s a totally different mentality to the UK. If anything, H&S culture is an American export to the EU arising from their litigation culture.
Believe it or not, Thomas Cook & Son, as it was then, was actually nationalised between 1948 and 1972, as part of the British Transport Commission.
I think you’re saying that EU rules prevent governments from intervening, however in the specific case of Thomas Cook, the company was a basket case and should have gone out of business (and likely a long time ago if debt wasn’t so cheap). To head off the inevitable reply about me being a capitalist b-d who doesn’t care about the workers, the right place to spend the rescue money is on a generous welfare state or BI and plenty of education and retraining.
It wasn’t a basket case. Fosun of China were negotiating taking a 70% stake. It was a £10 billion a year multi-national (with two thirds of the business outside the UK) providing 19 million holidays a year. What it was was burdened with debt from the ill-advised takeover of MyTravel in 2007. Another of those deals where the city advisors, bankers and lawyers all cashed in except the company and the shareholders were left holding the baby (i.e. all the debt). There is almost no country except the UK that allows major companies to be destroyed by financial plundering the way we do. See ICI, Dunlop, Eveready, Thomas Cook, Cadbury, etc etc. It was also severely affected by Brexit plus Tunisia and Turkey as that led to a major downturn in UK people booking holidays. The non-UK side of TC was doing quite well.
But Thomas Cook wasn’t carbon neutral, so by your very arguments that meant they were carbon bankrupt and so thereby fiscally bankrupt, and therefore you should be cheering their removal from the market.
I suggest you go back to Worstall’s website
I have no doubt Thomas Cook would go under SCA
But planning a gtransitio0n makes sense and this does not
But Worstall never was subtle, was he?
Can you explain further the ‘transition’ you envisage?
I’m assuming that once being declared ‘carbon bankrupt’ and must cease trading at some point in the future and the company would be run down over time. I can’t imagine anyone will buy anything from them
For a listed company presumably the share price will crash.
How will anyone supply or work for this company which has a closure date and potentially more creditors than cash?
First, there is no reason why the company should have more creditors than cash
It is entirely possible that the reverse might be true
But let’s be clear that if we’re serious about the climate issue no one is going to be surprised about Whitby companies might be climate insolvent
Airlines will be: that’s a fact
So too then will some of the industries based on them. Caribbean cruising will not look too good.
And cars are in trouble. But we will move. It is conceivable they can engineer themselves out of this whereas for airlines that is not at present
Will steel be? Maybe not, but it will be hard
Many agorcehncials will be problematic
So will cement
So in turn will housebuilding be unless it re-engineers, which clearly it can
And so on
Should some of those companies be valued a great deal less now? Yes. They are valued on the basis of stranded assets. I am suggesting that this be stated, explicitly. That the misrepresentation end. Do you have a problem with the truth being told and there being an end to the lies being told about the way pensions are being invested now? Why?
And yes, there will be a need for substantial retraining. That’s why it is such a big focus in my view of the Green New Deal
But let’s not pretend these are not issues: they are. Let’ face the facts. That’s what this accounting does
I will do a blog on this
“…… Whitby companies might be climate insolvent…” ?….. 🙂
Roll-on artificial intelligence and machine learning.
Artificial stupidity has definitely passed its sell-by date. 🙂
You wrote a blog yesterday saying ‘making profit should not now be the primary goal of a business: being net-zero carbon should be’. Now you are saying an airline and holiday business should have been bailed out?
What would Thomas Cook’s accounts look like under your sustainable cost accounting? Would it (or any other travel company for that matter) be permitted to continue in business?
But there was a vastly better way to become insolvent than the route they were pushed down
Is it really that hard to work that out?
Apparently yes…
I presume Timmy boy has been commenting by the rash of comments that have appeared
You should really engage your own brain
I sense a new book:
Richard Murphy’s guide to a better insolvency’
Sounds like a best seller to me
Or better still, a new government department:
The Office for Better Insolvency
After all, surely we will need a new government department to assess and regulate the business of carbon compliance ?
Tim Canterbury suggests:
“The Office for Better Insolvency”
What was I saying about Artificial Intelligence…? Bring it on, I’m sure it could learn to make blog comments 🙂
🙂