The Court of Justice of the European Union (CJEU) on Wednesday dismissed a suit by Austria contesting the European Commission’s approval of government investment aid for the upgrade of Hungary’s Paks nuclear power plant.
Austria had argued that Hungary’s direct award of the project to a Russian contactor in the framework of an agreement involving a 10 billion euro credit from Russia violated European Union rules on public procurement. The EC had cleared the aid citing a provision in the Treaties that allows aid for certain economic activities, as long as it “does not adversely affect trading conditions to an extent contrary to the common interest”.
“Assuming that a tender procedure may have had an influence on the amount of the aid, which Austria has not proven, such a factor would not by itself have had any effect on the advantage which that aid constituted for its recipient,” the CJEU said in a statement.
The CJEU also rejected allegations of “disproportionate distortions of competition and unequal treatment”, resulting in the exclusion of producers of renewable energy from the deregulated internal electricity market, noting that member states are free to decide the composition of their own energy mix, while the EC cannot require state financing to be allocated to alternative energy sources.
The EC cleared the aid for the construction of two blocks at the Paks plant, Hungary’s sole commercial source of nuclear energy, in the spring of 2017.
Hungarian Foreign Minister Péter Szijjártó welcomed the decision, saying the dismissal was a “great victory for Hungary… declaring the Paks upgrade to be fully in line with EU regulations.” Speaking on the sidelines of a NATO foreign ministers’ meeting in Bucharest, Szijjártó said the decision was a boost to Hungarian energy security.
Hungary is taking care to comply with all environmental and professional requirements, and prioritises security in the project, he said. The CJEU decision said that the investment’s permits and funding were fully in line with EU regulations, he said. “We’ve fended off another attack,” he said.
He called on “institutions, banks and countries … wanting to block the construction by unlawful means” to consider the decision and refrain from obstructing a project key to Hungary’s energy security and to maintaining its achievements in curbing household energy costs.