Future Euratom loans in doubt over nuclear safety concerns

Date: 01/03/01

By Laurence Frost

FINANCE chief Pedro Solbes faces an uphill struggle when he asks ministers to approve up to €2 billion in controversial loans to build nuclear power plants in Eastern Europe.

The Economic and Monetary Affairs Commissioner will table a proposal later this month to increase the lending power of the EU's atomic programme Euratom, which is approaching its €4-billion limit. Officials say around €250 million in funding for the completion of a badly needed Romanian reactor at Cernavoda now depends on an infusion of new money.

They say projects in other eastern European states are also under 'informal' consideration for the loans, earmarked for safety improvements and decommissioning.

EU governments have not yet been consulted on the increase - but there are already signs that the Commission may not win the unanimous backing it needs.

"We're basically very uneasy about the current Euratom regime," said a senior Austrian government official. "It's not an investment in safety - it's an unwarranted subsidy for nuclear power."

Previous Euratom lending increases were approved before Austria entered the Union in 1995 as the only country with a statutory ban on nuclear power.

Atomic safety is still a hot political issue in Austria, where protesters recently closed the border to highlight fears over the new Temelin plant in the neighbouring Czech Republic. "This proposal will create a very difficult situation," the Austrian official warned.

Commission aides say they are now close to finalising the terms of the Romanian loan.

Last April saw approval of the first Euratom loan for over a decade, when €212.5 million was pledged for upgrades to two Bulgarian reactors at Kozloduy.

This was followed in December by €680 million for the completion of two Ukrainian reactors, Khmelnitisky 2 and Rovno 4.

Commission officials who work on Euratom say there are compelling safety arguments for EU involvement in the execution of nuclear construction projects.

But green groups say the Union has very little influence on safety considerations in practice, with national governments and regulators having the final say.

"They say they're doing things to 'internationally acceptable standards' - but none of these standards are even defined," said Patricia Lorenz of Friends of the Earth Europe, adding that the Kozloduy reactors upgraded with a Euratom loan would lack some of the safety features introduced at Temelin.

But the EU nuclear lobby insists strict safety conditions are applied to all loan applications.

"The Commission contracts independent safety advisors to look in detail at all technical aspects," said David Sycamore of the European Atomic Forum (FORATOM).

Romania insists the EU money is vital to guarantee the energy needs of a future increase in growth.

"For the moment there's enough power to go around," said one diplomat. "But when the economy gets moving, there won't be. Of course Austria will oppose this - they've got plenty of imported power, so it's easy for them to criticise their "By being involved we're able to influence compliance with safety standards that would be acceptable to the West," said one.

Finance chief, Pedro Solbes, faces an uphill struggle when he asks ministers to approve up to €2 billion in controversial loans to build nuclear power plants in Eastern Europe.