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French prime minister announces plan to nationalize electricity giant EDF

French prime minister announces plan to nationalize electricity giant EDF
New French Prime Minister Elisabeth Borne announced plans to nationalize struggling nuclear power giant Elictricite de France SA in an address before parliament Wednesday. Photo by Mohammed Badra/EPA-EFE

July 6 (UPI) -- France plans to nationalize its nuclear giant Elictricite de France SA, Prime Minister Elisabeth Borne announced on Wednesday.

The French government will move to increase its stake in EDF, from 84% to 100%, as the electric company struggles with an energy crisis throughout Europe that has been aggravated by Russia's invasion of Ukraine.

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"We must have full control over our electricity production and performance," Borne said to parliament in her first state of the nation speech as prime minister.

"We must ensure our sovereignty in the face of the consequences of the war and the colossal challenges to come ... That's why I confirm to you the state's intention to own 100% of EDF's capital."

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Shares of EDF closed up 15% following Borne's announcement after having been down earlier in the day.

EDF has struggled with issues stemming from its aging reactors and cost overruns in efforts to construct new ones. These issues have been exacerbated by a government-imposed cap on electricity prices, as well as the war in Ukraine, which has made it more expensive for the utility to cover its own electricity-output shortfall.

French President Emmanuel Macron pitched nationalizing EDF during his re-election campaign in March, saying that it would help to bolster French energy independence and facilitate its efforts to reach net-zero emissions by building more power plants.

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The proposal is also expected to be a win for Macron that could see a lower house of parliament rally around him after he lost his outright majority in the nation's parliamentary elections last month.

Borne told the divided parliament that she would aspire to "approach every draft law in a spirit of dialogue" and openness.

"Disorder and instability is not an option for France," she said. "We must give back meaning to the word compromise."

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