The £4 billion transfer of Glasgow’s council housing stock to the independent Glasgow Housing Association (GHA) is now in jeopardy as the European Commission launches an investigation into the move.
The EU is to investigate claims that the transfer of housing stock is in breach of its own competition laws.
Campaigners petitioned the European parliament claiming that the incentives from both Holyrood and Westminster breached the competition laws since they were dependent on tenants voting for the transfer to the GHA.
Tommy Sheridan MSP wrote to the commission claiming that the £300 million interest-free loan to the GHA also breached EU competition laws.
The loan is viewed as crucial to the GHA’s financial plans to take over the housing stock from 28 November. The financial plans include a further £700 million raised from the private sector to cover repairs.
The GHA rejected the claims as "malicious", but the European Commission is known to investigate only those complaints which are deemed by members to warrant further exploration. The EU’s inquiry is unlikely to be completed until the autumn placing the GHA’s proposed takeover date in November in doubt even if the investigation finds that no breach of the law has taken place.
A spokesperson for the Scottish executive said: "We are still working towards a transfer by the end of this year."
