Legal opinion commissioned by Greenpeace suggests that any French government financial support to EDF to enable the company to build the Hinkley Point C nuclear power station in the UK would almost certainly be blocked by the European Commission.
The legal viewpointà‚ is that the commission would not agree to government assistance as it would constitute a breach of state aid guidelines.
The FT reports that the French government is this week discussing financial support for EDF, after Jean-Bernard Levy, chief executive, said the company needed fresh state help before it would give the long-awaited final go-ahead to the contentious à‚£18bn Hinkley Point project.
Three barristers at London’s Monckton chambers said all possible routes for the government to support EDF would constitute state aid in the EU and therefore require review by Brussels.
“It would be difficult to justify such further measures as being compatible with the [EU] internal market,” says the opinion.
The barristers consider four different methods open to the French government to help support EDF, which is 85 per cent state-owned. The first is for the government to take future EDF dividends as shares rather than cash; the second is for a direct recapitalisation of the company; the third is for the state-owned bank CDC to provide support; and the fourth is for France to prop up the utility’s French operations.
The lawyers conclude that a private investor would not credibly provide EDF with investment in any of these ways, meaning the case will probably be brought to the commission.
Representatives from other legal firms were in consensus with that opinion. Tim Malloch, a commercial litigator at Mishcon de Reya, said: “The commission made clear in 2014 that they would have to go back and approve any future aid [for Hinkley Point]. But since then the British government has said that the project is not needed for keeping the UK’s lights on, so an approval would be less likely this time.”
Conor Quigley, a barrister at Serle Court specialising in European competition law, said: “Since the European Commission has looked at Hinkley Point financing in other respects, I’m sure they would want to do so in respect of any French government action.”
Vincent de Rivaz, the head of EDF’s UK operations, has hinted that the final investment decision on the project will be made at a board meeting on May 11.
[bc_video account_id=”1214147015″ player_id=”4232537622001″ video_id=”4854101173001″ min_width=”320px”]