The nationalization of EDF revives the debate on the restructuring of the French electrician

The nationalization of EDF revives the debate on the restructuring of the French electrician

In the wake of the European Parliament’s vote on including gas and nuclear in the EU’s green taxonomy, Prime Minister Elisabeth Borne announced that the government wants to nationalize French energy giant EDF.

On Wednesday (July 6), before a National Assembly not won over to her cause, Prime Minister Elisabeth Borne blasted her general policy speech with a resounding announcement: “I confirm to you today the intention of the State to hold 100% of the capital of EDF”.

Applause rains down from the center of an assembly that looks like a Roman crowd. Remembering history, the head of government solemnly declares that France must ” to assure [sa] sovereignty in the face of the consequences of war and the colossal challenges ahead”.

This rumor of nationalization had been circulating the editorial staff for several weeks. When in doubt, EURACTIV asked the question directly to EDF officials. The latter had replied, without giving any official source, that there was “ongoing thoughts”.

EDF nuclear partly concerned by the green taxonomy

The state’s intention is now known, three hours after the European Parliament voted in favor of including gas and nuclear in the EU’s taxonomy on sustainable finance.

The government is thus taking advantage of a happy combination of circumstances to make its positions heard. Because if he welcomes this taxonomy, it only encourages private investment.

The French energy giant is therefore only relatively little concerned, since the State already holds more than 83% of its capital. Therefore, this announcement of nationalization is not a red revolution, but it should allow France to strengthen its investments sovereignly.

“We will invest in nuclear power with the construction of new reactors and innovations for the nuclear power of the future. It is a low-carbon, sovereign and competitive energy”declared Elisabeth Borne during her general policy speech.

“To succeed in the energy transition is to manage it” she added, in direct reference to the controllable nature of nuclear power in the face of the intermittence of renewable energies (EnR).

A whole program sketched out in November 2021 by Emmanuel Macron to extend the life of existing nuclear power plants, build 14 large reactors and develop small modular reactors (SMR).

This announcement of nationalization is “skillful enough” according to the economist Mathieu Plane invited on the set of LCP. However, the oppositions ask for guarantees and clarifications on the internalization of the losses.

Elisabeth Borne did not, in fact, specify the terms of her action. Therefore, the doubt is allowed to imagine the use of a partial nationalization through a revival of the Hercules project.

Relaunch of the Hercule project?

This project plans to divide the energy company into two entities: one public for nuclear power, and the other private for renewable energies.

On the one hand, the State would assume the maintenance and development of the nuclear fleet without fear of pressure from the financial markets. On the other hand, France would take advantage of the enthusiasm of these same markets for renewable energies to catch up as quickly as possible with its development lag compared to the European average.

Nationalizing at least the nuclear part of the group would even be “the least worst solution” according to the economist Elie Cohen who shares his point of view in a column with a well-found title and published by the social-liberal think tank Terra Nova.

Contacted by EURACTIV, the economist and director of research at the CNRS assured before the vote on the taxonomy, that in the event that it was negative, France would not question its nuclear mix for all that.

The guarantee that the French taxpayer would bring to the lenders would nevertheless remain the best life insurance for EDF and the atom.

In this sense, whatever the method used to achieve her ends, Elisabeth Borne asserts that nationalization “will enable EDF to strengthen its capacity to carry out ambitious and essential projects as soon as possible for our energy future”.

Other support measures

At the same time, always in a logic of emancipation from fossil fuels, the Prime Minister specifies several other measures on the set of the JT of TF1.

First, maintaining the rebate of 0.18 cents per liter of gasoline “until the end of summer” at least.

This measure will be accompanied by a special measure for those who “use their car a lot for work” and which will be presented on Thursday (July 7) in the Council of Ministers as part of the presentation of the “purchasing power” bill.

Among other things, Elisabeth Borne announces the development of a “long-term rental” offer for electric cars starting at 100 euros per month.

Public money would be “better used if it is to switch to clean mobility rather than subsidizing fossil fuels for a very long time” concludes the head of the new government.

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