Can Europe Make It?

Britain and Austria: clashing on EU state aid

Britain's application for £17.6bn in EU subsidies for the construction of the brand new Hinkley Point nuclear power station has drawn the ire of Austria's government, who say that such a subsidy is illegitimate and unethical.

Alessio Colonnelli
25 February 2015

The power station is set to join Hinkley Point B (above) in the Bristol channel. Crowley. Some rights reservedThe UK applied for £17.6bn in EU subsidies for the construction of the brand new nuclear power station, Hinkley Point C in Somerset. The request of help received the green light last year, much to the surprise of other EU members. Some others also frowned, particularly within the renewables industry.

In fact Germany had been denied state aid help to support its epochal Energiewende (energy transition), which consists in eventually closing down all nuclear reactors for good in an effort to replace them with sources of renewable energy. ‘This is double-standards’, is what many ought to have thought.

Austria’s going full tilt

Austria has decided to appeal against the state aid granted to the British government: building a nuclear power station should involve no EU help whatsoever. The ministry of agriculture, forestry, environment and water – also known as the Ministry for an Austria that’s worth living in – has published a statement, where it spells out its stance on the matter very clearly. The Alpine government is undoubtedly having a right go at the UK and its apparently dubious financial demands from Europe.

Despite the heavy bureaucratic jargon, this ten-page document literally and unmistakably says at some point: “Austria’s view is that the granting of aid for nuclear power plants is illegitimate both under the general EU state aid criteria and according to the principles of Article 107, Chapter II of the Treaty on the functioning of the European Union (TFEU). This is true in general and in this specific case [Hinkley’s] as well.”

A headline by Vienna’s financial daily Wirtschaftsblatt from last week brilliantly captured the disgruntled mood at 10 Downing Street over the arisen controversy originally unveiled by The Guardian: “London [ministers] say they’ll take every opportunity to sue Austria’”.

Austrian diplomats told the Foreign Office that their country was not challenging the UK’s right to choose its energy mix; instead it’s questioning compatibility between Britain’s scheme on Contracts for Difference (CfD) and Brussels’ policy on state aid.

The openly shown willingness to sue or damage in any way comes across as a strong statement of intent; nearly a declaration of war of sorts. Two EU partners here have adopted very assertive stances, indeed almost aggressive ones as the directedness of their language suggests – the temperature is going up and up. Will it reach boiling point?

Causing a stir

Eva Glawischnig, the national spokesperson for the Austrian Greens, is playing a pivotal role in this story. A member of the Austrian parliament’s lower house since 1999, Glawischnig obtained in that same year her PhD in law.

In her dissertation at the Karl-Franzens University in Graz, she dealt with the issue of a border nuclear power plant in Slovakia. She then put the knowledge she gathered in a lawsuit against the controversial Mochovce nuclear power station which highlighted the cover up of excessive radioactive emissions.

The action against Slovak Power Plants was dismissed on appeal before the regional court for civil matters in Vienna in July 2005. This represented the initial training ground providing Glawischnig with the relevant experience, stamina and self-assurance she needed to take on the Brits on the Hinkley Point C case.

At a press conference held in Vienna on 11th February, Glawischnig claimed that Austria shouldn’t feel intimidated by the British government’s threats; she also added that putting forward a valid point against wrongly-awarded EU aid is of paramount importance for the EU citizenry as a whole.

In other words, the Austrian MP seems to suggest that somebody had to step in against the rather strange procedure implemented by London. ‘The process around the construction of Hinkley Point C should not “constitute a precedent”’, said Glawischnig; she warned against a kind of ‘banking package for nuclear energy’. ‘Such subsidies for nuclear power are tantamount to pillaging taxpayers’ pockets’, was her conclusion.

The UK government argues that nuclear energy is entitled to subventions from Brussels because no private sector investment of this scale would come through until 2030. The European Commission agrees both on this and on the fact that EDF – the French company building Hinkley Point C – would not get any additional advantages through the state aid in question.

What the Austrian ministry is also saying

A crucial passage in the abovementioned ministerial statement says: “The subsidization of a nuclear power plant [is an attempt to rectify] a market failure, but in so doing it becomes incompatible with Article 107. The effects on competition are restrictive. This is an industry whose technology is still uncompetitive after decades spent promoting it artificially through subsidies, which have kept it afloat to the detriment of more sustainable and innovative technologies that are being pushed out of the market.”

Plucky as they are, the Austrian authorities are unlikely to cause great damage to the UK nuclear project, as this has practically the full backing of the EU Commission anyway. According to the Austrian Greens’ website, Slovakian diplomat Maroš Šefčovič – current vice-president of the European Commission’s Energy Union – has produced documents suggesting that Hinkley Point C is just the beginning of a whole plan aimed at financially supporting nuclear power stations with huge sums. “They [the British government] are not going to intimidate us. And the nuclear lobby won’t be able to either”, are Glawischnig’s final words for the moment.

Things will be considerably delayed, though; and that’s what’s bugging 10 Downing Street. What’s more, the involvement of a senior Slovakian politician is worth noting here: it’s not preposterous to imagine there would be an element of wanting to play down any accusations from Austria as a way of vindicating the trouble originated from the attack on Mochovce’s nuclear power plant just over a decade ago.

Countervailing political disengagement: perhaps the public needs more of this

Whilst on the one hand this story is showing us that the whole Brexit issue is just a pantomime – such is effectively the level of UK interdependency and involvement with the EU –, on the other it’s now blatantly obvious there’s an ever growing gulf between the EU’s official rhetoric (see the benign EU Charter of fundamental rights) and its actual, hard-nosed dealings with Big Business. The imminent TTIP agreement is just a confirmation of all this.

The lesson from the ballsy and daredevil Austrian ministry is: a dissenting spanner in the works of gluttonous transnational corporate interests can come about not only from highly-organized grassroots activism, but oddly enough from the margins of Establishment too. And that’s inspiring new stuff, the kind of thing that can help the public engage more with politics – perhaps one’s vote is actually worth the paper it’s written on.

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