Ukrainian war… Promoting 100% expansion of government stake to control the market
The French government announced that it would re-nationalize the French Electric Power Company (EDF), which had been on the path of privatization since the early 2000s. It is interpreted as an attempt to protect the country’s energy companies, which have been aggravated by the crisis in Ukraine, and to strengthen control over the market.
French Prime Minister Elisabeth Born said in a speech at the House of Representatives on the 6th (local time) that “France’s energy sovereignty must be guaranteed in the face of the consequences of the war in Ukraine and the challenges ahead.” We will expand from 84% to 100%.”
According to the French government’s policy, EDF is expected to follow the process of renationalization in the future. EDF, one of Europe’s largest nuclear power companies, was launched as a state-owned company after World War II, but was partially privatized in the early 2000s to improve financial transparency and negligent management. However, as the importance of energy increased due to the Ukraine war, the country turned to nationalization again.
EDF’s renationalization policy reflects the French government’s will to strengthen control over energy supply and demand. This is because after the partial privatization of EDF, there was a problem of conflicting interests between the government, the major shareholder, and private shareholders. In particular, after the Ukrainian war, the conflict between the government, which wants to control energy prices, and private shareholders, who wants to protect company interests, escalated, and the stock price fell sharply. Prime Minister Born on the same day stressed that “(through the nationalization of the EDF) we will protect the people suffering from soaring energy prices.”
The French government is also interpreted as an intention to protect its electric power companies from the chaos of the Ukraine war through the nationalization of EDF and to strengthen the construction of new nuclear power plants in the future. EDF’s financial condition has deteriorated due to discounted electricity sales and malfunctioning of old nuclear reactors, and it has even requested a bailout.