Belgium

The U.K. and Belgium on Monday demanded the European Commission scrutinize the sale of General Motors Co.'s European operations to a consortium led by car-parts maker Magna International Inc. to ensure that rules on government aid aren't breached, The Wall Street Journal reported. The governments of both nations fear that GM factories in their countries will bear the burden of job losses that the deal will bring. Magna confirmed Monday it plans to cut 10,500 jobs from GM Europe's work force of about 50,000.

The European Union wants to make limits on bankers' pay a key issue when leaders from the Group of 20 largest economies meet in Pittsburgh later this month, The Wall Street Journal reported. Several of the bloc's finance ministers, in Brussels for a special meeting to prepare a common negotiating stance for the G-20 summit, cited pay curbs as their main priority. "We have to stop the restarting of the bonus culture," Swedish Finance Minister Anders Borg told journalists before the ministers' meeting.

The German government may be willing to finance a restructuring of Adam Opel GmbH to avoid an insolvency of the troubled General Motors Co. European unit, The Deal Pipeline reported. Berlin has not yet been asked but might be willing to finance a GM-led restructuring after general elections Sept. 27, Financial Times Deutschland wrote. Germany might also reportedly be willing to support a controversial offer for Opel from Brussels financial investor RHJ International SA if it promises to only hold the company temporarily or if it teams with a major auto manufacturer.

The European Commission, the EU's executive arm, says Belgian-French financial services group Dexia's restructuring plan could distort competition and does not guarantee recovery for the group, Reuters reported. The Commission said certain measures the group had proposed could distort competition, and questioned whether Dexia would be able to obtain sufficient long-term funding.

The European Commission, the European Union’s executive branch, said Thursday that it would release badly needed funds to Latvia to help the struggling Baltic nation head off a collapse of its economy and maintain its currency link to the euro, The New York Times reported. The commission said in Brussels that it would release €1.2 billion ($1.7 billion), the second installment of a 7.5 billion euro financing package that the country secured in December with the European Union, the International Monetary Fund and other international lenders.

As in other countries, the current economic and financial crisis has already taken its toll on Belgium. The number of bankruptcies has reached record heights. Unemployment is rising and forecasts for 2009 are pessimistic, Legal Week reported. In this context, the Belgian Parliament adopted a new Act on Business Continuity, which came into force on 1 April, 2009. This new Act replaces the former and unsuccessful judicial composition procedure with a more effective and flexible restructuring instrument.

The European Commission said on Friday that it had launched an in-depth investigation into the restructuring of Belgian-French financial group Dexia, Reuters reported. The Commission said in a statement it intended to make sure the restructuring plan would guarantee the long-term viability of the group, hit hard by the financial crisis. But the executive arm of the 27-nation European Union also authorised guarantees worth $16.9 billion from the Belgian and French governments to aid in the sale of FSA, the bank's U.S. subsidiary.

Saab Automobile, which filed for bankruptcy protection last month, will cut 750 jobs at its main factory in southern Sweden in response to falling demand, Bloomberg reported. About 650 of the affected workers are tied to production, while the remaining 100 jobs are administrative positions, Saab spokeswoman Gunilla Gustavs said by telephone from Gothenburg today. Saab has about 4,100 workers, most of them in Trollhaettan, where Saab makes the 9-3 and 9-5 models.

General Motors' German unit Opel could slash 3,500 jobs as part of a plan to cut costs and relaunch as an independent company, GM Europe head Carl-Peter Forster told Bild newspaper. Staff reductions would hopefully not exceed that figure at Opel, which employs around 25,000 workers in Germany, he told the daily on Wednesday. To survive, Opel needs around €3.3 billion ($4.17 billion) in state aid from European governments to save jobs and keep plants open, the company has said.

The European Union's emergency summit on March 2 to discuss growing protectionism is a make-or-break moment for the 27-nation bloc. At stake is its greatest achievement -- the single market for goods, people and capital. A row over France's latest car-industry bailout plan threatens to drive a wedge between member states. How the EU responds will have consequences not just for the EU but for global free trade. Unfortunately, the omens don't look promising. On the face of it, the French plans look like a clear case of state aid--illegal under EU rules.