EU scrutiny of Northern Rock bonds could scupper plansGovernment plans to give a guarantee to Northern Rock bonds could yet founder at the hands of the European commission European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community , which will subject them to tough scrutiny under EU state aid rules, and from high-street banks that compete with the Rock.Treasury ministers, it emerged at the weekend, will have to convince Neelie Kroes Neelie Kroes (born July 19, 1941 in Rotterdam, Zuid-Holland) is a Dutch politician and businessperson. Neelie Kroes was a Member of Parliament in the Netherlands for the People's Party for Freedom and Democracy (VVD). , EU competition commissioner, that either the plans involve no state aid or that any aid complies with strict guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. . Alistair Darling, the chancellor, who discussed the bank's crisis with Kroes at the Treasury in late November November: see month. last year, will have to convince her that his plans would make Northern Rock a viable entity without any further injections of aid. He will also have to shrink shrink Vox populi noun A psychiatrist its activities by selling off some of its assets, perhaps including parts of its mortgage book, to compensate for any "distortions" caused by the aid - if Brussels insists the latest package is indeed aid. Kroes approved the initial rescue scheme but her approval lapses at the end of February. Commission officials refused to comment as Brussels has yet to be notified about the rescue scheme. The plan is also likely to cause concern among Britain's high-street banks, which fear that they will be put at a competitive disadvantage. The bond issue will solve only part of the problem faced by the Newcastle-based bank, which will need to keep turning to the wholesale markets to offer new mortgages and finance existing home loans. Banks are worried that the state guarantee on the initial bond issue could be extended to other debt financings Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay by Northern Rock, which might then be able to raise money from investors while money markets have dried up and stopped other banks raising cash in this way. One analyst said: "There is a very real danger of a creeping creeping 1. gradual progression of a lesion or tissue growth. 2. prostrate growth pattern of a plant, e.g. c. buttercup (Ranunculus repens), c. caustic (Euphorbia drummondii), c. charlie (Glechoma hederacea), c. guarantee. Even if there is no guarantee in name, it could seem as if there is one in reality." Analysts believe Northern Rock will still need to tap the financial markets because depositors will not return fast enough to finance new and existing mortgages. At a glance The Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. proposal · Northern Rock to issue £24bn of bonds · Bonds backed by government guarantee in exchange for a fee and share of the company · Two-week deadline for Virgin, Olivant and Northern Rock teams to come up with final bids · If bids not good enough, Rock to be nationalised for limited period 
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