Commission to defy governments by funding new nuclear reactors

Date: 03/08/00

By Renée Cordes

PLANS drawn up by the European Commission to provide funding for two new Ukrainian nuclear plants to replace the unstable Chernobyl reactor are set to spark furious protests from member states.

External Relations Commissioner Chris Patten and Enlargement Commissioner Gunter Verheugen will argue in favour of providing financing for the two reactors in a report due to be discussed by the full Commission on 6 September, at its first meeting after the summer break.

But the precise level of financing will depend on a decision later this year by the European Bank for Reconstruction and Development (EBRD), which is considering providing more than €216 million in loans for the €1.571 billion project. The rest of the money could come either from Union coffers or export credits from individual countries.

Commission officials insist that the EU is obliged to provide financial support for the two reactors, known jointly as K2R4, under the terms of a 1995 agreement between the Group of Seven industrialised nations and Ukraine. That accord called for the closure of Chernobyl by the end of this year and included possible funding for the two replacement reactors through loans as one of many options for assisting the country's power sector and compensating for the closure of Chernobyl.

However, sources within the Commission admit that they are still grappling with the precise phrasing of the communication, which was due to be discussed by the full Commission at its 26 July meeting but was taken off the agenda at the last minute amid deep divisions within the EU executive.

While officials insisted this week that the communication would be adopted next month, they face an uphill struggle to win member states' support for the initiative. Although the Commission does not need governments' or the European Parliament's approval to provide a loan under the terms of the Euratom treaty, critics argue that it might be political suicide to ignore their objections.

"We have two dynamics at work here," said Tobias Muenchmeyer, a nuclear expert at Greenpeace International in Berlin. On the one hand, he said, the EBRD was pushing hard for a decision on financing the two reactors while, on the other, "there is a growing number of countries opposing this". Environmental groups also insist that any decision to help fund the projects must go hand in hand with measures to ensure that the reactors meet western safety standards.

Sweden, Germany and Austria's foreign ministers have all spoken out against providing EU loans for the reactors, although they have expressed support for financing non-nuclear energy projects. Denmark and Belgium have also questioned whether the Union should finance the project and whether the two reactors are the least-expensive option for meeting Ukraine's power needs - one of the criteria laid down by the EBRD.

The Commission is also coming under fire from environmental organisations and some member states for failing to take adequate steps to improve safety conditions at nuclear reactors throughout central and eastern Europe and the Newly Independent States.

In their draft communication, Patten and Verheugen say the EU executive has introduced a number of new measures to achieve this in response to requests from the European Parliament and the Court of Auditors. Examples include reducing the overall number of contracts, cancelling certain projects and increasing the role played by the Union's Joint Research Centre. But their paper acknowledges that there is still a long way to go.

Plans drawn up by the European Commission to provide funding for two new Ukrainian nuclear plants to replace the unstable Chernobyl reactor are set to spark furious protests from Member States.