Top Austrian lawyer says Commission unlikely to be challenged on UK nuclear power project

One of Austria’s foremost legal experts in the field of energy believes Vienna will not go through with its proposed legal action against the European Commission over its approval of subsidies for Britain’s Hinkley Point nuclear power project.

Doctor Peter Polak of Fiebinger Polak Leon Attorneys told Power Engineering International he doubted Austria would seriously pursue filing the lawsuit with the European Court of Justice. It is scheduled to be filed at the European Court of Justice on 21st March.
Peter Polak
He said he believed the Austrian action was motivated more by domestic politics than any true objection to the UK government’s price guarantee for the nuclear power project.

“We have four local elections in four different provinces this year and, as always, in the build up to elections we have collective stupidity. Don’t worry – this will go nowhere,” he said.

“There is a substantial possibility that this will not be pursued by Austria in any way. I think they pretend to be interested in the subject. I may be too sceptical about it, but it strikes me as so completely ridiculous.”

Polak says a plan by Germany to introduce a road toll (to impact on drivers going from eastern to western Austria) would represent an obvious case for Austrian leaders to get exercised about, in terms of being affected by another member state.

He said Austrian silence, in the shadow of its ‘big brother’ on this issue, is telling, while its government is willing to score green points through its complaint on Hinkley.

Political, Rather Than Legal Issues

“Austria is not directly or indirectly affected in any way by whatever happens in the UK, but Germany is planning a road tolling system involving a freeway connection within Austria, yet affording German citizens a tax break. If that was challenged I could understand as it directly affects Austrian and would make sense.

“Realistically what we are talking about are not legal issues but political issues. The sole explanation I can give is the fact that there are elections in the four provinces of Austria this year, that’s why you have that and it will go away.”

“Either they won’t make a submission or they will but will then withdraw it. I don’t think they will ever file it.”

Polak believes the real reason Austria has so dramatically challenged policy in the UK is because the majority Social Democrat party is attempting to bolster its own environmental credentials ahead of local elections in an effort to see off its Green Party coalition partner.

“If you look at the most important local election, which takes place in Vienna, the Social Democrats lost some ground to the Green Party in the last election and had to form a coalition with the Greens. The real battle in Vienna is going to be between the Social Democrats and the Greens so from a political perspective they have to show they are the real green party in order to keep checks and balances against their coalition partner, and keep the Greens below 12 per cent. If you are the governing party in the capital city you have substantial influence over the whole party and thereby central government as well and that’s what it is all about.”

Surprise At Strength Of UK Reaction

So why has the UK government taken such a hard line on Austria’s declarations? Were they not aware of the situation on the ground?

The Foreign Office’s Europe director, Vijay Rangarajan, conveyed a message that “the UK will take in the future every opportunity to sue or damage Austria in areas that have strong internal political effects,” unless the lawsuit was dropped. Dr Polak says he is surprised at the aggression shown in the UK response

“I felt the reaction of England was pretty strong and I have some sympathy. If we were to start out litigating our political issues against other member states that is not a very elegant way of doing it. But I was surprised at the language ” it may be that the project in England is politically not so stable and that is having an influence.”

“I think we are really seeing political activism within the framework of a legal system and this is an abuse of the legal system generally and there should be more restraint.”

Dr Polak’s views differ from Reinhard Schanda, a partner at the Vienna-based law firm Sattler & Schanda, who toldà‚ Interfax last month “I think that there are good chances for success for a lawsuit.”

“British Diplomatic Threat Will Only Reinforce This Consensus Within The Government”

According to Schanda, the commission is likely to have argued in its decision ” so far unpublished ” that the Euratom treaty provides the basis for its decision.

“It remains to be seen whether an EU objective of common interest can derive from the Euratom treaty,” Schanda added.

Schanda hasn’t changed his mind in the interim and told Power Engineering International, “I am pretty convinced that the Austrian government will indeed file the lawsuit. As far as I can tell there is full consensus between the two parties in Austria’s government to go ahead with it. Neither party would be able to step back from this decision. Nuclear power is utterly unpopular in Austria. The British diplomatic threat will only reinforce this consensus within the government.” à‚ 
Hinkley Point
The legal action specifically targets the approved strike price ” the UK government’s price guarantee ” for operator EDF, which is set at à‚£92.50/MWh ($142.20/MWh). If construction of the Sizewell C nuclear plant in Suffolk goes ahead, the strike price will be lowered to à‚£89.50/MWh.

“In our opinion, it is not the job of the commission to grant subsidies of any kind to support nuclear power,” Dafine Mula, of the Social Democratic Party of Austria, said last month.

If Vienna does indeed follow through on presenting the submission, it could prove to be a damaging delay for British nuclear ambitions. State aid proceedings take an average of about two-and-a-half years between the lodging of the action for annulment and the judgment, according to the ECJ’s own statistics.

Hinkley Point has already been delayed because of lengthy negotiations over the strike price, and a further two-and-a-half-years could push back the estimated start-up date to 2023.

Fiebinger Polak Leon are recognised as one of Austria’s leading law firms and is the country’s member of the Energy Law Group, founded by the leading European energy law firms.

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