Make-or-break EDF restructuring talks that concluded in March: Sources

© Reuters. The company logo for Electricite de France (EDF) can be seen in Paris

PARIS (Reuters) – The negotiations between Paris and Brussels over an overhaul of the state-controlled power company EDF (PA 🙂 are entering the final phase. The outcome is expected in late March, two union sources and a third person familiar with the EU discussions said.

One of the union sources who were briefed on the matter said there was reason to be optimistic that an agreement could be reached after discussions over the past few weeks, although the outcome is not yet certain.

France and the European Commission have been arguing for months over a proposed reform of the utility and its nuclear arm, as part of a reorganization known as the “Hercules Project”, partly aimed at helping the indebted group better recover its costs.

Paris and Brussels disagreed on how to keep the nuclear power plant and various departments of EDF separate in order to avoid creating a structure in which all businesses would benefit from some form of State aid.

Talks on a deal that would have to reset the price at which EDF sells nuclear power to third-party suppliers are currently at a stage of manufacture or disruption, the three sources said.

“The negotiations are coming to an end and there are some elements that are viewed as positive (by France),” said the union source, who was briefed on the talks. A second union source said a “final” meeting was planned for late March.

EDF and the French finance and energy ministries declined to comment. The European Commission could not be reached immediately for comment.

The French government previously stated that an agreement had not yet been reached, and EDF boss Jean-Bernard Levy said in a newspaper interview published this week that the EU wanted to dissolve the company, a solution that is also inaccessible to France be.

“There is an absolute red line: there will be no dissolution of the EDF,” Finance Minister Bruno Le Maire told BFM Business TV on Wednesday.

The EDF unions have been vehemently opposed to any reform of the group, including the intermediate scenario proposed by the company and the French government of fencing off the business units, as this could be a prelude to a complete dissolution.

Unless an agreement with Brussels is reached soon, it may become more difficult to lead reform through the French parliament before the 2022 presidential election. In turn, delays will penalize EDF and its ability to invest, the company warned.

“The National Assembly’s schedule is getting very tight, and if it doesn’t come to a conclusion soon, it will last until 2022. And politically it will be difficult to deal with it in the middle of an election campaign,” said Marie-Noëlle Battistel, a specialist in energy policy MP said to Reuters.

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