The European Commission on Monday said it launched an in-depth investigation into Hungary’s plan to provide financing for the expansion of the Paks nuclear projekt. The government’s firm position is that there is no state aid in the Paks 2, while opposition parties called for the immediate half of the 12.5 billion investment.
Last week, the European Commission started an infringement procedure against Hungary on competition concerns, saying the 12.5 billion euro project was awarded to Russian Rosatom without tendering. Another inquiry may be underway pertaining to the 30-year classification of certain business and technical data.
The government is committed to keeping the Paks nuclear plant in state ownership as this is the way Hungary’s energy security can be guaranteed and cheap electricity ensured for households and businesses, the Prime Ministers Office said.
Brussels launched an in-depth investigation to assess “whether a private investor would have financed the project on similar terms or whether Hungary’s investment constitutes state aid”. If it involved state aid, the commission would investigate further for any distortions of competition on the Hungarian energy market.
The prime minister’s office said that during a two-year consultation period the commission had not raised doubt whether illegal state aid had been involved in connection with the project. The government stands ready to face any investigation and will prove that there was no illegal state aid and that the Russian loan had not been called down. Hungary has signed a loan agreement with Russia for the 12.5 billion euro project, which is the biggest ever state investment on record.
The ruling Fidesz party group said the announcement represented “another attack against public utility fee cuts”, to which the left wing in Hungary was giving its support. Fidesz called Paks the cheapest source of electricity for Hungary, adding that “the nuclear power station’s development is unavoidable for the Hungarian public and industry to receive cheap electricity sustainably.”
LMP co-chair Bernadett Szél said that preparations cost hundreds of billions of forints and if the government fails to suspend them, LMP will consider filing a criminal report for budget fraud and damage caused by administrative authorities.
The opposition PM party said the government should immediately suspend preparatory works on the Paks expansion project because all future spending on it “will most probably be money wasted”.
