Brussels, 23/11/2015 (Agence Europe) - On Monday 23 November, the European Commission opened an in-depth investigation under the European state aid rules into an aid project of Hungary to finance the construction of two new nuclear reactors on the Paks site.
While the member states are entirely free to decide on their own energy mix, the European institution's in-depth investigation will consider whether a private investigator would have funded the project under the same conditions, or whether the Hungarian investment constitutes state aid.
“The Commission has to carefully assess whether Hungary's investment is indeed on market terms or whether it involves state aid. This requires a complex analysis”, said the Commissioner for Competition, Margrethe Vestager, in a press release. In its investigation, the Commission will assess the economic relevance of the construction, operation and dismantling of the two reactors on the basis of the intergovernmental agreement concluded between Russia and Hungary and in light of the forecasts regarding the EU energy market. If this gets the green light, it will then consider whether this support is compatible with the EU rules which authorise aid favouring certain objectives of common interest.
On the basis of a bilateral intergovernmental agreement, Moscow will provide Budapest with a loan of €10 billion to fund the additional two nuclear reactors. Hungary, which would bear 20% of the construction costs, argues that the project is not state aid (within the meaning of article 107 of the TFEU treaty): the investment will be financially viable and made under similar terms for any private investor.
Last week, the Commission opened infringement proceedings against Hungary regarding the Paks II nuclear power plant, as it considers that the award of the relating public procurement contracts are insufficiently transparent with regard to the European 'public procurement' directives (see EUROPE 11434). (Origianl version in French by Mathieu Bion)