The claims about why the British government – that is, your and my wallets – should subsidise something owned by the French government are getting ever more desperate. The background is that Eurostar is losing a bundle – hey, it’s international travel during a lockdown on international travel. It’s largely owned by the Frogs through their national train operator. They started out by demanding that the British government bail it out. The requests have become politer as it was obvious that that wasn’t going to work. But as they’ve become politer so have the excuses become weaker:
Eurostar has struck a deal with its lenders to refinance hundreds of millions of pounds of debts, paving the way to re-open talks with ministers over financial support from British taxpayers.
OK, so they need less than they did. The first approach having been rebuffed, that’s good. But look at what they’re now saying:
UK support would be made on the basis that if Eurostar collapsed, Britain could left without a rail link under the English Channel for up to two years, insiders added.
Well, yes, if that French government owned company simply shut up shop and walked away then there could be a gap in the service.
And yet that’s not how corporate bankruptcies happen, is it? An administrator in bankruptcy is appointed. Whose task is to maximise the returns from the assets in favour of all investors – both equity and debt although with different emphases.
So, a tunnel or train services that is still operating has more value than one where they’ve all just walked away? Clearly, the still operating service has more value. So, the service, even given the bankruptcy of the current legal wrapper of it will continue to operate.
Sure, it might well take 18 months to get a new company in there, feet under the table, fully capitalised and all tickety boo. But the idea that corporate bankruptcy means the immediate liquidation of the service is nonsense. As all involved do actually know as well.
Sure, they’re asking for less money now but the excuses are getting ever weaker too. Paris should cough up to protect their own investment and if they don’t then sell it off – through the administrator – to the highest bidder. Job done.
After all, we have been here before. The tunnel itself went bust and they didn’t go fill it in again, did they?