Nuclear Reactors 302 - Dispute in European Union Over Russian Involvement in Expansion of Hungarian Paks Power Plant

Nuclear Reactors 302 - Dispute in European Union Over Russian Involvement in Expansion of Hungarian Paks Power Plant

        There is a major schism in the European Union over the use of nuclear power. Some western European countries including Germany and Austria want to end the use of nuclear power in the EU. Eastern European members of the EU countries including Hungary want to continue and expand the use of nuclear power. There has been an ongoing political and legal dispute in the EU over a contract that Hungary signed with Rosatom, the Russian nuclear company for the construction of new reactors at the Paks power plant. Austria pushed for legal action to block the contact with the EU court. Recently, the EU notified the Hungarians that their contract with Rosatom was not acceptable according to EU rules. The Hungarians said that they did not care and were going to press on with the project.

        The EU Executive Commission has been holding discussions with the countries involved in the dispute in the hopes of finding a solutions that was agreeable to all. The contract with Rosatom to build two new reactors at the Pak power plant in Hungary includes a generous loan from Russia of almost eleven billion dollars. The problem is that this arrangement does not follow the EU rules for public utility procurement.

         Recently, a representative for the Commission said that they had given Hungary two months to reply to their concerns. Hungary says that the Commission demanded that they halt work on the Paks project but the Commission has not confirmed this. Hungary claims that it took all the relevant laws and regulations of the EU into account in the creation of the contract with Rosatom. Hungary says that it will send a response to the Commission soon but that they were going to continue with the project.

        The Hungarian Prime Minister said that Hungary notified the Commission in 2013 that it intended to sign a contract with Rosatom. He said that the head of the Commission did not raise any concerns about the proposed arrangement at that time and Hungary proceeded with the project. The PM stated that Hungary had been in constant contact with the Commission up to the present and that EU Commission regulators had approved the plans for fuel supply and the technical specifications for the Paks project.

        The PM charged that this challenge to their Rosatom project was not really a dispute about following proper procedures but rather an attempt to stop a member of the EU from entering into an eleven billion dollar commercial project with a non-member state. The PM said that EU companies wanted to be involved in the expansion of the Paks plant but that none of them were willing to abide by the terms that Rosatom offered. Specifically, Rosatom has agreed that Hungary will have permanent ownership of the new Paks reactors. Representatives of Rosatom say that it agreed with the PM and that it intended to fulfill its obligations under the contract.

         It is possible that this dispute could reach the highest court in the EU and that fines might be levied against Hungary. Hungary says that it is ready to fight the challenges to the Paks deal in court. The Commission says that an additional concern over the project is that the Paks plant would be "overly dependent" on Russia. This is a problem given the recent belligerent behavior of Russia in the seizure of Crimea and agitation in eastern Ukraine. Russia has a history of using control of energy such as oil and natural gas to exert political and economic pressure on other countries.

Hungarian Paks power plant: