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- EURATOM Loan Increase
Updated: June 2014
2004, no decision has been taken on the increase of Euratom Loan. In
2008, however, Andris Piebalgs, the EU Commissioner for
repeated in his speeches the growing
need for investments to replace ageing plants, adding that the EU Commission
It is expected that the proposal must be approved by all countries (unanimous), but the Council’s legal services are reviewing the procedures. In the Council paper 5871/03, Contribution to the Legal Services to the Proceedings of the Working Party of Financial Councilors, 29th January 2003, it states: ‘ The decision in question [increase in the Euratom Loan ceiling] could therefore be adopted if a majority of the members of the Council Voted in favour of it’.
The countries discussed the proposal in December 2002, where the German , Belgium and Austrian government stated that they did not agree with the proposal. In Germany this position was supported by a resolution in the German Bundestag, March 2003.
The Commission proposed the increase of EURATOM loan ceiling by 2 billion Euro, November 6, 2002 as part of a nuclear package. The Parliament has no decision-making power in this question. The proposal also includes new guidelines for the loan facility.
the last increase in the loan ceiling was approved in 1990 it was stated
In recent years, two loans have reached the final decision stage. The loan for the Kozloduy 5 and 6 (K5 and K6) in Bulgaria, and the loan for Khmelnitsky 2 and Rivne 4 (K2/R4) in Ukraine. In the case of K5 and K6 a loan of EUR 212.5 million was approved in 2000, but only provisional approval was given for the loan equivalent of USD 585 million for K2/R4. It was expected, and required, that final approval would be given within 12 months. However, just prior to the final decision, at the co-funder the European Bank for Reconstruction and Development (EBRD in November 2001), the project was suspended.
The EU Commission approved on July 20, 2004 a loan of 83 million USD to the Ukrainian Khmelnytski 2 and Rivne 4 (K2R4) reactors to work after planned start up in the last part of 2004 to (hopefully) improve safety of the reactors.
The 1990 Council's decision requires that the "total value of the transactions affected reaches ECU 3800 million". The K2R4 decision is at best a draft approval, this does not constitute a transaction, therefore the Commission's proposed application for a loan ceiling is invalid, as the total value of actual transactions is less than ECU 3300 million. Therefore, the Council can reject the Commission's proposal on this single basis.
In its application to increase the loan ceiling the Commission gives two main justifications for the increase, namely that "our involvement in these projects ensures that they will be completed in line with Western safety requirements" and "the Euratom Loan facility will be instrumental in assisting these countries - Bulgaria, Lithuania and Slovakia - to launch decommissioning programs".
In the only prior project funded by a Euratom Loan in Eastern Europe, at Kozloduy 5 and 6 in Bulgaria, the involvement of Euratom was not a fundamental part of securing any increase in nuclear safety standard. The project was completed with ECA financial support from US Export-Import Bank, which has its own nuclear safety standards requirements, furthermore, it was originally envisaged that both the French and Germany Government ECAs would contribute to the project. However, their assistance was not needed with the Euratom Loan being awarded. Therefore, the Euratom Loan was not unique in proposing to bring Western nuclear safety standards to the project, but rather replaced other Western financial agencies in the funding consortium.