If Hungary emerges unscathed from the European Commission’s two investigations into its controversial Russia-backed nuclear power project, it will largely have France and the U.K. to thank for setting rule-bending precedents on such projects. Brussels provided its blessing in November to Hungary’s decision to skip a competitive tender and hand the multi-billion euro contract for building the two Paks II nuclear reactors to Russia’s Rosatom. Budapest had argued that the nuclear giant was the only company that could meet the project’s specific technical needs. Next up, the Commission is expected to approve Hungary’s deployment of state aid for the €12 billion project, 80 percent of which would come courtesy of a loan from Moscow. That decision has been delayed for several months, but it’s expected in the coming weeks. The Commission’s decision not to challenge the lack of a competitive tender is likely to have pushed the limits of what the EU normally allows, as political worries about Hungary’s posture toward the EU dominate the relationship between Brussels and Budapest, said Jan Haverkamp, a nuclear energy consultant at the NGO Greenpeace. Both approvals have precedents in two earlier nuclear energy cases: France’s decision 10 years ago to award the contract to build its Flamanville 3 nuclear reactor directly to state-controlled Areva, and the U.K.’s deal to subsidize its two new Hinkley Point C reactors. In 2007, France’s state energy utility EDF awarded Areva the contract to build the Flamanville reactor in Normandy, without inviting bids from other companies. Nearly two years later, the Commission sent Greenpeace a letter explaining that it would not challenge the move because France had shown that Areva’s reactor was the only one that met the “technical characteristics” the project required. According to Greenpeace, France excluded Areva’s nuclear industry rivals by asking for a reactor with an unusually specific electricity generation capacity of 1,658 megawatts, rather than giving a more general range. And when it comes to state aid, EU Competition Commissioner Margrethe Vestager already laid the groundwork for approving Paks II’s subsidy in a letter to Green MEPs Rebecca Harms, from Germany, and Benedek Jávor, from Hungary, last July, pointing to the Commission’s decision to approve the U.K.’s Hinkley Point C support scheme. In the letter, Vestager pointed to the Commission’s decision to approve the U.K.’s Hinkley Point C support scheme in 2014. The Commission, she argued, has less leeway to evaluate state aid for nuclear power projects because it’s limited by the 59-year-old European Atomic Energy Community, or Euratom, which is meant to support and encourage investment in nuclear projects where needed. “This means that if member states choose to invest in nuclear energy, the Euratom’s objective to facilitate that investment becomes an objective of common interest that the Commission should take into account in its state aid assessment,” she said. France and Britain may have forged the way, but the Commission’s grounds for blessing the Paks II terms have grown shakier in recent months, opening it up to potential backlash.
Politico 12th Jan 2017 read more »