(October 10, 2003) Various investors and creditors have, after a round of all-night negotiations, finally agreed how they will share out what is left of the failed nuclear generator British Energy (BE). News of the agreement came half a day after a UK government deadline set for midnight on 30 September.
(594.5548) Friends of the Earth Europe - On 12 September, the IAEA called on Iran to prove by 31 October that it had no secret nuclear weapons program. According to the 15 Arab states, Israel also has to be mentioned and be required to sign the NPT. Although Israel is a member of the IAEA it never signed the NPT, being one of the few countries in the world who didn't. Egypt proposed a further resolution calling for a nuclear-weapon-free-zone (NWFZ) in the Middle East.(3)
The negotiations between creditors were complex, and centred on balancing different claims by different parties. Some of the banks, for example, had lent money to BE just two years earlier just to buy a coal-fired power station, Eggborough in Yorkshire. Others creditors such as the main bondholders argued that shareholders should not get anything, as normally shareholders always carry the highest financial risks. In the end, a compromise was reached.
BE has also announced, after some delay, that its 50% share of U.S. joint venture Amergen will be sold to its partner Exelon. Disposal of all overseas assets was a necessary condition imposed by the UK government as part of the rescue. News of the rescue or the sale did not affect BE's share price, which has remained a penny stock at around 5 pence all year, valuing the company at roughly £30 million (US$ 51 million).
For anti-nuclear campaigners, all this could have been an entertaining time to watch nuclear investors in an angry fight for what little is left of their cash. But it was not so, because tragically so much public money is being wasted to sweeten a deal that otherwise would have certainly failed.
Attention now turns to Brussels, where EU competition commissioner Mario Monti is scruti-nizing a UK request to give the plan the green light. Such subsidies are classed 'state aid', and so normally outlawed by EU single market rules that seek to eliminate market distortions. The BE case, which is set to become a major test case, is expected to be decided sometime in 2004.
If the state aid is rejected, then most people expect BE will go into administration and go back into the state sector. If this were to happen, then each of BE's stations would likely be sold back to the state for just £1 each.
For earlier WISE/NIRS Nuclear Monitor articles on BE see: 578.5468: "Huge state handout aims to keep British Energy afloat". 583.5490: "Dismantling British Energy". 589.5526: "British Energy's rocky path ahead".
EP: "EURATOM OBSOLETE AND OUTDATED"
In a important breakthrough, the European Parliament has called for a radical overhaul of European Atomic Energy Community (or Euratom), describing the Community's on-going promotion of the nuclear industry as "obsolete and outdated".
MEPs made the move in a resolution on 23 September on the proposed new "EU constitution", which is expected to replace all of the existing EU treaties, except Euratom. Their call goes much further than the European Convention, where attempts to seriously discuss Euratom were suppressed.
The Euratom issue has not yet been taken up by EU leaders, who exclusively hold power to make or break treaties. Governments began final negotiations on the constitution in Rome last weekend, expecting to adopt it by next spring when enlargement and MEP elections take place.
The Austrian government has proposed a separate treaty-revision conference for reforming Euratom within a year, believing that separating the Euratom issue from the constitutional talks increases the chances of success.
The approach could however fail if it does not gain enough support from other states, making it critical for anti-nuclear groups across the EU to push the issue strongly.
A new email newsletter, EURATOM?, has been launched on 3 October by Friends of the Earth Europe. The new initiative follows the developments which are currently ongoing in the European Union. The purpose of the newsletter is to make Euratom more visible and so speed up the political process of reform. The first issue runs news on a European Parliament resolution (see box on next page), the European Commission in its role as part-time merchant banker for the nuclear industry, European plans for new waste dumping legislation, etc. EURATOM? will be published six to eight times a year and next issue will be mailed out in November. To subscribe, send a blank email to: firstname.lastname@example.org.