French government plans to nationalize electricity giant EDF

By AP News

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PARIS (AP) — France's government plans to nationalize French electricity giant EDF amid an energy crisis aggravated by Russia’s invasion of Ukraine, Prime Minister Elisabeth Borne said Wednesday.

PARIS (AP) — France's government plans to nationalize French electricity giant EDF amid an energy crisis aggravated by Russia’s invasion of Ukraine, Prime Minister Elisabeth Borne said Wednesday.

The French state now holds an 84% stake in the company, one of the world’s biggest electricity producers. Its share price jumped on the news.

“We must have full control over our electricity production and performance,” Borne said in her first major speech to France’s parliament. “We must ensure our sovereignty in the face to the consequences of the war (in Ukraine) and the colossal challenges to come. ... That’s why I confirm to you the state’s intention to own 100% of EDF’s capital.”

EDF manages France's sizable fleet of nuclear reactors, which are facing a raft of technical and other problems. New-generation reactors are years behind schedule and billions over budget.

Borne is laying out her main priorities to the National Assembly on Wednesday after parliamentary elections last month that resulted in French President Emmanuel Macron's government losing its majority.

The prime minister was expected to face harsh criticism from lawmakers from the left and from the right, who together now outnumber members of the president's centrist alliance in the National Assembly.

The leftist coalition, known as Nupes, has said it would bring a no-confidence motion to symbolically mark its opposition to the government.

The motion has very little chance of passing since it is highly unlikely to get approval from more than half of all lawmakers. The major opposition group, the far-right National Rally, has already said its representatives would abstain.

If confirmed, the no-confidence vote would be organized within a week, but no earlier than Friday afternoon.

Borne's office said her speech would focus on topics including boosting jobs, tackling climate-related issues, providing equal opportunities and how to bolster France's sovereignty as the war in Ukraine is deeply affecting European economies .

A bill to be presented at a Cabinet meeting Thursday is expected to focus on helping struggling households amid rising energy and food prices. It is to include measures worth 25 billion euros ($25.5 billion), including increasing pensions and some welfare payments by 4%.

Macron’s alliance suffered big losses in the parliamentary elections. The centrist alliance, Together!, won the most seats in the National Assembly but fell 44 seats short of a majority as voters opted for the leftist coalition or the far right.

Having the largest group of lawmakers, Macron’s government still has the ability to rule, but only by bargaining with opposition legislators. To prevent deadlock, Macron’s party and allies want to negotiate compromises on a case-by-case basis with some opposition lawmakers.

On Monday, Macron rearranged his Cabinet and called on his new government to “stand strong” amid Russia’s war in Ukraine and “transform” the heavily indebted French economy.

Three out of Macron’s 15 ministers failed to keep their seats in last month's elections and were replaced.

In addition, Damien Abad, who was minister of policies for the disabled and is under investigation for rape and sexual misconduct, was also replaced. Abad firmly denies the allegations.

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Author: AP News

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Originally published by Associated Press Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

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