Macron’s failure in the election will complicate the reorganization of the EDF

PARIS, June 20 (Reuters) – The loss of an absolute majority of Emmanuel Macron’s party and his allies in the National Assembly is likely to complicate the EDF’s reorganization project, as people say the process involves a series of legislative changes. familiar with this issue, Reuters interview.

Last summer, the government was forced to postpone a preliminary reorganization plan called Hercules due to ongoing differences with Brussels and the unions.

According to its initiators, the project was to provide EDF with new resources by placing its nuclear fleet in a state structure – whose current norms do not cover costs and force the group to fall into debt – while its activities in renewable energy and electricity distribution will create a single entity. open to private investors.

Emmanuel Macron had hoped to resume the reorganization of the EDF after his re-election in April in the context of the war in Ukraine, which threatens security of energy supply in Europe and forces prices to jump, but Sunday’s parliamentary elections will force the government to compromise. and risk slowing down the reforms the President wants.

“It is difficult to measure the consequences [des législatives sur la réforme d’EDF], it’s a bit early and the government has never announced the details of its new project. But this does not seem ideal, “a source close to the group’s leadership told Reuters on Monday.

One of the main challenges in the coming weeks will be Emmanuel Macron’s ability to form a coalition agreement with Les Républicains, which has so far rejected the hypothesis, otherwise negotiations on each bill will have to begin.

“The real risk is that all of Macron’s proposals will be rejected by the opposition (…) and leave the EDF in the status quo that worries us,” said Sebastian Michel, FCE CFDT Federal Secretary for Energy Policy and Environment. transition.

“VERY MORE DIFFICULT TO PASS”

Difficulties with EDF’s structural funding prompted the government to consider fully renationalizing the group, which could provide for the repurchase of shares owned by minority shareholders without having to go through parliament. But that would be only the first step.

“The reorganization project promises to be much more complex, as a number of actors have to vote in parliament,” said a source familiar with EDF’s reorganization scenarios, citing, among other things, a review of regulations that should guarantee selling prices for nuclear products. .

An EDF spokesman on Monday insisted on “the need for reform for (the group) quickly”.

He also stressed that it will be a global process, including the introduction of new rules and a new organization of the company to continue to register it in the European electricity market and enable it to play its full role in the energy transition.

EDF also suffers from the unavailability of about half of its historic nuclear fleet and the government’s decision to force it to sell more nuclear energy at low prices to its competitors in order to limit rising electricity prices.

In this context, in early spring, it had to increase capital by 3.16 billion euros, which the state subscribed to about 2.7 billion, and French Economy and Finance Minister Bruno Le Mer said. about possible nationalization, so that “all options (were) on the table.”

On Monday, JPMorgan analysts said they expected the President of the Republic to continue the full renationalization of EDF and the executive to set a guaranteed price for all French nuclear production, although the European Commission needed the green light.

In any case, the timing and progress of the process “are uncertain at this stage”, but they added in a note. (With Sylvia Aloise, edited)