Three French socialist MPs on Thursday (15 December) presented a bill that aims for a ‘true nationalisation’ of energy giant EDF, as opposed to the government’s plans to recapitalise it.

Read the original French article here.

At the start of July, French Prime Minister Elisabeth Borne announced the recapitalisation of energy company EDF, saying that her government would take steps to hold 100% of its capital. However, according to many MPs, this is not enough.

Opponents of the government’s plan argued that it would give the state free rein to relaunch the Hercules project, a proposal that aimed to divide EDF into three separate entities, first presented in 2019 but abandoned in 2021. The overriding concern about Hercules was that the divided entity dedicated to renewables would be at risk of being sold off to the private sector.

To counter this possibility, the Socialists put forward a bill on Thursday which proposes “a true nationalisation, as opposed to this takeover bid which only aims at delisting the group [EDF] to better reorganise and dismantle it”.

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A ‘true nationalisation’

The recapitalisation, as the government plans it, would allow the French state to sell some parts of EDF whenever it wants, as the company would still be structured like a normal shareholder-owned corporation even if the state is the sole shareholder.

On the other hand, a “true nationalisation”, as the Socialists have called it, would make EDF a “unified public group” with “non-transferable” capital, unless the French parliament agrees to a transfer of activities, the bill states.

While the government said it did not want to relaunch the Hercules project, Socialist MP Philippe Brun said he does not believe in the government’s assurances.

“I have no confidence in [Economy Minister] Bruno Le Maire,” he said, adding that the government will sell the business “in small steps”.

“Of course, it will no longer be the Hercules project, but the Heracles or Jupiter project, call it what you will,” he added.

Brun highlighted a Finance Committee report on the 2023 finance law for which he was the special rapporteur, which provides the state with the means to proceed with recapitalisations such as that of EDF.

In particular, the MP pointed to a note which stipulated that an increase in EDF’s capital by the state would make it possible “to prepare on a new basis the negotiations (nuclear regulation and reorganisation of the Group) to come with all the parties”. In other words, the recapitalisation is a way for the government to press for the Hercules project’s return.

While drafting the report, Brun said he was also unable to gain access to documents that “would formalise the abandonment of the ‘Hercules’ project”, he said.

The EU’s fault?

Joining the press conference, which took place at EDF’s headquarters in Paris, was the energy branch of the Confédération générale du travail (CGT) union.

“The main problem is the European energy market,” said a representative of the CGT union’s energy branch.

For nationalisation to work, it is necessary to leave or at least apply a top-to-bottom reform to the EU energy market, the CGT representative added.

Asked by EURACTIV France about the merits of exiting the market, Brun said that true nationalisation would not stop France from complying with EU directives, acknowledging, however, that the market would have influence on the bill he is defending.

How EDF is managed will have a direct result on how France experiences this winter, Brun said. He highlighted that France’s energy capacity will be reduced by 30-35% as of Thursday due to the closer of more nuclear reactors, requiring France to import German-produced gas at high prices.

With a ‘true’ nationalisation, “EDF could pay its debt by keeping profitable activities, such as renewables, in its fold,” Brun said.

“EDF must remain a control lever in the hands of the State to undertake the major projects of tomorrow,” First Secretary of the Socialist Party, Olivier Faure, added.

By contrast, some experts like Professor Jean-Michel Gauthier, director of the Energy & Finance Chair at HEC Paris, who was interviewed by EURACTIV France in mid-July, believe that selling off EDF’s profitable activities would strengthen the development capacity of its nuclear industry.

Raphaël Schellenberger, a Les Républicains deputy and chairman of the parliamentary committee of enquiry into France’s energy sovereignty, said he is “divided”. He believes that nationalising EDF to save the giant nuclear activities is an “admission of failure”.

The Socialists’ bill will be submitted to the National Assembly at the end of December, proceed to a first study by a parliamentary committee at the start of February, after which it will be presented to all lawmakers.

Confident about his nationalisation proposal, Brun said “there is a majority in the National Assembly” who would back his text.

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[Edited by Nathalie Weatherald/János Allenbach-Ammann]

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