French PM announces nationalisation of debt-laden power giant EDF

·3 min read
© Stephane Mahe/Reuters

Prime Minister Elisabeth Borne called for compromise on Wednesday in her first speech to France's new parliament, where her minority government will need support from opposition parties to pass legislation. She also announced the nationalisation of the French electricity giant EDF.

"We will approach every draft law in a spirit of dialogue, compromise and openness," Borne told MPs as she laid out the government's policy priorities.

She often had to speak through shouts and chanting from the floor, especially from the benches of the left-wing NUPES alliance, which called an immediate no-confidence vote on her leadership.

After recalling her family history, including her father's past in Nazi concentration camps, and her pride at being only the second French woman PM, Borne ended by saying: "We will manage to build together".

French politics has been cast into an unusual period of instability following parliamentary elections last month which resulted in President Emmanuel Macron's ruling falling short of a majority by 39 seats.

Borne outlined immediate priorities that are expected to garner wide support, such as helping low-income families cope with a cost-of-living crisis and releasing extra funding for the struggling health service.

EDF to be re-nationalised

But Borne also set her sights on other policy goals announced by Macron during his successful bid for a second term in April, including plans to push back the legal retirement age to 65 and the full nationalisation of the EDF power company.

"I confirm to you today that the state intends to hold 100 percent of the capital of EDF," Borne told lawmakers.

The French state currently holds 84 percent of EDF (Electricité de France), with staff holding one percent, and 15 percent in the hands of institutional and retail investors.

Shares jumped more than five percent after trading down five percent before the Prime Minister's speech.

"This evolution will permit EDF to reinforce its capacities to carry out in the shortest possible time its ambitious and indispensable projects for our future energy" supplies, Borne said.

The energy crisis triggered by the Ukraine war has weighed heavily on electricity firms like EDF that have state-regulated tariffs.

The French government has also added pressure to the heavily indebted firm with its goal of launching a new effort to replace EDF's ageing nuclear reactors.

"The energy transition passes through nuclear" power, Borne said, repeating a position adopted by President Emmanuel Macron earlier this year.

Nuclear reactors still account for a large majority of France's electricity production.

Confidence vote

Without formal allies in the 577-seat national assembly, Borne decided not to call a confidence vote on her policy speech, something almost all past prime ministers have done after their first appearances in the lower house.

Holding a vote would be "too risky" for Borne, who would have been forced to step down if she lost, explained Bruno Cautres, a researcher at the Cevipof political studies unit at Sciences Po university in Paris.

"She made the right decision, but she didn't really have a choice."

The hard-left France Unbowed (LFI) party, one of the big gainers in June's parliamentary polls, which unified the left under the NUPES alliance, filed a no-confidence motion alongside its Socialist, Communist and Green allies before Borne even began speaking.

"Without a confidence vote, we have no choice but to file this motion of defiance," the groups' joint text read.

(with wires)

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