Renationalisation of EDF: what it really changes for you

This was a crucial step for the relative majority enjoyed by the government. This Wednesday, July 6, 2022, Elisabeth Borne went before the parliamentarians of the National Assembly and the Senate, at the Palais Bourbon, where she delivered her first speech on general policy. Because she has decided not to submit to the traditional vote of confidence, the Prime Minister and her executive team are now the subject of a motion of censure, tabled by the various groups of the Nupes, the alliance of forces of the left who was able to conquer the presidency of the Finance Commission. However, this maneuver carried out jointly by La France Insoumise, Europe Ecologie-Les Verts as well as the Communist and Socialist parties will not have prevented the former Minister of Labor from revealing all or part of her project.

Faced with the inflation that is hitting the country, Elisabeth Borne notably raised the issue of energy, informs Capital. More specifically, she spoke of EDF, which she intends to renationalize 100%. “I confirm to you today the State’s intention to hold 100% of EDF’s capital. This development will enable EDF to strengthen its capacity to carry out ambitious and essential projects for our energy future as soon as possible”, she argued.

“Several reasons indeed justify the renationalisation of EDF. Let us first recall that the company’s accounts have been considerably degraded by Jean Castex’s tariff shield and anti-inflation measures in general”, explains from the outset the economist Philippe Crevel, of liberal obedience, for whom it is above all a question of “securing society, averting the risk of bankruptcy”. “EDF will now have the weight of the State behind it as often as it will have to borrow or face a somewhat tight deadline”, he observes again.

The ecological aspect must also be taken into account, according to the expert. “Private shareholders may not have invested the money necessary to allow the realization of the ecological transition as desired by the executive. By removing these shareholders, who are already very much in the minority, the State is ensuring that the company will have the necessary means to carry out its mission”, further specifies the director of Cercle de l’Epargne. But what will be the impact, exactly, for the average citizen?

The question which perhaps torments the French men and women, at a time when only the bulwark initially brandished by Jean Castex protects them from a sharp rise in energy prices, is that of the impact of the renationalization. Should we expect a higher bill? Response elements.

“In the immediate future, it is unlikely that a renationalization of EDF will lead to real additional costs for French people. The tariff shield would continue to protect them in this case anyway”. That being said, underlines Philippe Crevel, this does not mean that such an operation will have no cost.

“All the same, we will have to expect the backlash: nationalization also implies compensation for private shareholders. Even if this should not represent a monstrous expense, it is a blow to be expected”, recalls the specialist, who is in any case not convinced that this is the best way to proceed for the comfort of customers. “Public companies are rarely the most accommodating,” he says.

There will come a time, recalls Philippe Crevel, when the situation will no longer be tenable anyway. Renationalization or not. “For the time being, it is the State which supports the price increase for French women and men. One day or another, it will no longer be possible to subsidize such a service”, predicts the specialist, who recalls that the price shield smoothes prices rather than canceling out the increase.

“It will inevitably be necessary, in the long term, to think about EDF’s financial balance. This mechanically requires returning to prices in line with the economic and financial reality of the company and the market.