June 21. 2024. 7:26

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Rebel French MPs pass law for ‘true nationalisation’ of power utility EDF

French lawmakers have approved the Socialist group’s bill to nationalise electric utility EDF, although the National Assembly was shunned by the presidential majority, which protested against the legal grounds for the text, particularly in relation to European law.

In early July, when the government told MPs that it was going to recapitalise 100% of Europe’s largest energy company, EDF, the National Assembly was largely in favour.

But a few weeks later, Socialist lawmaker Philippe Brun issued a parliamentary report alleging supposed hidden reasoning behind the recapitalisation of EDF, namely a plan to divide the group’s activities, something the government denies.

The socialist representative took advantage of the situation to present a bill drafting the “true nationalisation of EDF” to counter the executive’s project.

After its adoption in the Economic Affairs Committee, the MPs approved the text on Thursday (9 February) by 205 votes to 1.

A “first step”

But in the view of the government and the presidential majority, the text is not fit for purpose.

The French government already owns 84% of EDF and has plans for full nationalisation as it is currently in the process of buying out minority shareholders.

The state’s recapitalisation bid should be definitively complete after May of this year, and if it is, France would own 100% of EDF’s shares, thus rendering the present nationalisation bill null and void.

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Legal mishaps

During the debates, the presidential majority MPs repeatedly pointed out that the text would violate the French Constitution, which forbids MPs to formulate a bill that creates new public expenses.

Yet, the Minister of Industry claims that EDF’s nationalisation, as it was drafted by the left, would cost €16 to 18 billion. Not to mention the fact that it would increase public spending by generalising the regulated electricity sales tariffs.

Lescure also questioned whether the bill respects European legislation, especially the article on the generalisation of the regulated electricity sales tariffs.

“I know that here, European law is a bit of a hassle, but the article is not in line with European law”, said Lescure.

Indeed, the 2003 EU directive on common rules for the electricity market requires the separation of electricity production, supply and distribution activities. Yet, the proposal mentions that “EDF is a unified public group” whose activities are, among others, “the production, transport, distribution, import and export of electricity”.

“The bill poses real risks to the energy ecosystem. If you had interviewed RTE [EDF’s branch charged with managing the French electricity networks], you would know that they are very concerned”, added Lescure.

Going through the Senate

For the moment, despite these mishaps, the left-wing, republican, nationalist and independent MPs succeeded. The process in the National Assembly was made easier by the fact that members of the presidential majority stormed out of the Chamber before the vote, angry at being put in a minority by other deputies.

Nevertheless, this “farce”, as the president of the Renaissance group in the Assembly, Aurore Bergé described the bill, might not survive the examination in the upper chamber, the Senate, which will take place in the next few weeks.

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