NEWSMAKER-EU state aid experts mix pragmatism, tough talk

October 16, 2009

By Foo Yun Chee

BRUSSELS, Oct 16 (Reuters) – Neelie Kroes, the European Union antitrust czar, has picked two high-fliers with a wealth of financial and state aid experience to help restructure Europe’s banking landscape in the wake of the credit crisis.

The stakes are high, with Kroes set to turn up the heat on lenders such as Royal Bank of Scotland, Lloyds, ING, Dexia, and a host of others who also received government aid, before she bows out at the end of her term in December.

She could force the sale of billions of euros of assets, branch closures, drastic cuts in balance sheets and market shares and curbs on payments to investors and executives in return for approving the bailouts.

Irmfried Schwimann, who heads the financial services unit at the European Commission’s directorate-general for competition, and Karl Soukup, in charge of a newly created support division, mix tough talk with pragmatism, lawyers and observers said.

“Schwimann combines very relevant know-how in financial market regulation with Soukup’s expertise in traditional rescue and restructuring aid cases,” said Till Mueller-Ibold, a state aid specialist at law firm Cleary Gottlieb Steen & Hamilton. Schwimann, 50, who has a law degree, has plenty of banking experience. She led an enquiry seeking to open the retail banking sector to competition and cut costs for consumers under the then Internal Market Commissioner, Frits Bolkestein, in 2005.


The mother of three is known for her pragmatic approach and willingness to listen to both sides of the story.

Criticised by trade unionists angry at being left out by the EU’s executive Commission in an expert panel working on a European Union financial action plan in 2004, Schwimann said there were no second-class stakeholders.

“Stop moaning about not being consulted, just present your arguments, then we will listen. We are open and willing to hear your views,” she told the unionists.

Soukup, a fellow Austrian, has equally impressive credentials. The 43-year-old, who regularly cycles to work, gained his doctorate in economics at the Vienna University of Economics and Business with a study of the EU’s state aid regulations for state-owned companies.

That came in useful when he joined Mario Monti’s cabinet in 2001 and led the Commission’s crackdown on the German Landesbanken, which resulted in them losing state guarantees for their financing.

“Soukup is a straight-talker, he doesn’t beat about the bush and he’s very knowledgeable,” said Michael Tscherny, a consultant and former spokesman for Monti, Kroes’ predecessor.

Since the start of the crisis, the state aid team has more than tripled to 55 people, with some 21 nationalities from all over Europe tackling scores of cases.

“There are people from other parts of the Commission, from national central banks, regulatory authorities, finance ministries, economists, lawyers, people with a background in business administration and accountancy,” said a Commission official.
(Additional reporting by Boris Groendahl in Vienna; editing by Simon Jessop)

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