“The EDF nationalization bill could prove harmful”

AT Following a turbulent public session, the bill to protect the Electricité de France group (EDF) of a dismemberment, supported by the Socialist Party, was adopted at first reading on 9 February, by the deputies of the New Popular Ecological and Social Union (Nupes), the National Rally (RN) and the Republicans (LR). If most of the debates focused on the extension of the tariff shield, the text provides above all for the nationalization of EDF, already 84% owned by the State.

“Item 1er. Electricité de France is nationalized. » The symbol is strong. The formula echoes the nationalization of electricity and gas in 1946 and the major nationalizations of 1982, which remain important moments in French political memory. Through the process of nationalization and at the initiative of the opposition, it is a real overhaul of the public energy service that would be at work

Faced with the strength of the symbol, we would almost forget the essential: this nationalization law will most likely be useless. At the same time, the government finalized its takeover bid allowing it to hold all of EDF’s capital. The operation should be completed by early May at the latest, while the judges rule on shareholder appeals.

Nationalization leads to the transfer, by authority, by law, of the ownership of a company to the State. But the State can also choose to acquire stakes in companies by common law procedures. This is what the government is currently doing with its takeover bid.

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The processes differ, but the result is the same: the State will hold 100% of EDF’s capital. However, unlike the government’s takeover bid, the text adopted by the Assembly opens up the possibility of a stake of up to 2% in the capital of EDF in favor of its employees.

A constitutional problem

Be that as it may, the law risks being definitively adopted when EDF will already be totally owned by the State following the takeover bid. Can a law provide for a nationalization which is no longer logically possible, since the company is already entirely the property of the State?

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This inconsistency poses a constitutional problem: the purpose of the law is to set out rules and must therefore have a normative scope, as the Constitutional Council reminds us. This is certainly not the case with a law that nationalizes in a vacuum. More fundamentally, with a nationalization law for nothing, there is a great risk of overusing the very instrument of nationalization, the expression par excellence of state sovereignty in the economy.

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