Proposal for a Council Decision amending Decision 77/271/Euratom on the implementation of Decision 77/270/Euratom empowering the Commission to issue Euratom loans for the purpose of contributing to the financing of nuclear power stations
Date: 2002-11-06
Institutions: European Commission
Subjects: EAEC Decision, EU borrowing, EU financing, Euratom loan, nuclear energy, nuclear power station

25.2.2003

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Official Journal of the European Union

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Proposal for a Council Decision amending Decision 77/271/Euratom on the implementation of
Decision 77/270/Euratom empowering the Commission to issue Euratom loans for the purpose of
contributing to the financing of nuclear power stations

(2003/C 45 E/23)

COM(2002) 457 final

(Submitted by the Commission on 6 November 2002)

1. Legal foundation of Euratom lending

EXPLANATORY MEMORANDUM

The Euratom lending instrument was established by Council Decision 77/270/Euratom of 29 March 1977
empowering the Commission to issue Euratom loans for the purpose of contributing to the financing of
nuclear power stations (the Establishing Decision).

The ceiling for borrowings was originally fixed by Council Decision 77/271/Euratom of 29 March 1977
on the implementation of Council Decision 77/270/Euratom as follows:

‘Sole Article:

Loans as provided for in Article 1 of Decision 77/270/Euratom may be contracted for amounts the
total of which shall not exceed 500 million European units of account; the European unit of account
is defined in Decision 75/250/EEC.

When the total value of the transactions effected reaches 300 million European units of account, the
Commission shall inform the Council which, acting unanimously, shall decide on the fixing of a new
amount as soon as possible.’

The ceiling was raised by various amendments of Council Decision 77/271/Euratom, the latest of which
(Council Decision 90/212/Euratom of 23 April 1990) increased it by 1 000 million ECU to 4 000 million
ECU (with reporting when 3 800 million ECU was reached).

The scope of the Euratom lending instrument was extended by Council Decision 94/179/Euratom of
21 March 1994 amending Decision 77/270/Euratom, to authorize the Commission to contract Euratom
borrowings in order to contribute to the financing required for improving the degree of safety and
efficiency of nuclear power stations in certain non-member countries (the Scope Extension Decision).

In particular, in Article 1 the Commission is

‘. . . empowered to contract, within the same limits, borrowings, the proceeds of which will be
allocated in the form of loans to finance projects to increase the safety and efficiency of the
nuclear power stations of the non-member countries listed in the Annex. For these projects to be
eligible they must:

— relate to nuclear power stations or installations in the nuclear fuel cycle which are in service, or
under construction, or to the dismantling of installations where modification cannot be justified in
technical or economic terms,

— have received all the necessary authorization at national level and in particular the approval of the

safety authorities,

— have received a favourable opinion from the Commission in technical and economic terms.

The Commission may borrow only within the limits of loans requested of it.

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The borrowing and corresponding lending operations shall be denominated in the same monetary
unit and carried out under the same conditions as regards repayment of the principal and interest
payments. Cost incurred by the Community in concluding and executing each operation shall be
borne by the recipient undertakings.’

The list of eligible non-member countries defined by the Annex to the above Decision is as follows: the
Republic of Bulgaria, the Republic of Hungary, the Republic of Lithuania, Romania, the Republic of
Slovenia, the Czech Republic, the Slovak Republic, the Russian Federation, the Republic of Armenia
and Ukraine.

2. Consolidation of the decisions

The Commission will separately propose to the Council a consolidation of the Establishing Decision and
the Scope Extension Decision, in particular:

— To ensure that there is equal treatment of current and future Member States after their accession;

— To ensure that safety and efficiency issues remain important criteria for the eligibility of projects;

— To ensure that decommissioning projects within the Community are explicitly eligible under certain

conditions.

3. Borrowing and Lending Ceiling

The current borrowing ceiling is fixed at EUR 4 000 million. Of this amount, EUR 2 876 million has been
used for borrowings related to loans granted to Member State beneficiaries. Loan approvals for certain
non-member countries now amount to approximately EUR 900 million (EUR 212,5 million plus EUR
equivalent of USD 585 million (1)). The total thus used and reserved is approximately EUR 3 776 million.
This is approaching the reporting level of EUR 3 800 million required by the Council. There are a number
of Euratom loan applications being processed, any of which may possibly exceed the balance of the
lending limit (about EUR 224 million). Each of these loan applications will be presented individually to
the Commission for decision, if and when ready. To ensure that the borrowing ceiling is not a constraint,
the Commission considers it prudent to inform the Council before the formal reporting limit is reached
and to propose an increase in the limit.

4. Justification for Raising the Borrowing and Lending ceiling

the scope of Euratom lending to certain non-member states in 1994,

With the extension of
the
Commission has a powerful financial tool that can be used to influence the nuclear safety beyond the
Union borders in the east. The two recent decisions to grant loans for projects in Bulgaria and Ukraine
demonstrate that the instrument can be used as a support for Commission policy in the field. Our
involvement in these projects ensures that they will be completed in line with western safety requirements
and facilitate similar actions in the future. In both of the cases decided, commitments relating to the safety
of older units have been agreed with the respective countries.

The Commission explicitly emphasises its support for the increase in the Euratom borrowing limit as it
will provide, in synergetic combination with other financial instruments, e.g. Community grants, a positive
contribution to the achievement of the Cologne European Council Decision of June 1999 with regard to
nuclear safety in candidate countries and Eastern Europe. Although a detailed assessment of nuclear safety
issues and levels is still in progress for candidate countries in the framework of the Atomic Questions
Group of the Council, it is already clear that major investment efforts will be required to achieve high
safety standards in these countries comparable to those in the EU.

(1) Exchange rate used was USD 0,85 for EUR 1 on 28.11.2000, i.e. USD 585 m equals EUR 688 m.

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Further, the decommissioning of a number of plants that cannot be upgraded and other installations will
require large volumes of investment. Contrary to the practice in the EU, funds to cover these investments
are generally not available. The Euratom loan facility will be instrumental in assisting these countries to
launch decommissioning programmes.

5. Conclusion

The proposal is to raise the ceiling from EUR 4 000 million to EUR 6 000 million with an obligation on
the Commission to report to the Council when the lending limit reaches EUR 5 500 million. These new
limits would ensure that Euratom loan applications in the pipeline could continue to be examined and
proposed for decision of the Commission, if and when ready.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Atomic
Energy Community,

Having regard to Council Decision 77/270/Euratom of
29 March 1977 empowering the Commission to issue
the purpose of contributing to the
Euratom loans
stations (1), and in particular
financing of nuclear power
Article 1 thereof,

for

pendent States and such an instrument is still considered
as relevant.

(4) Experience has shown that

is desirable to raise, by
EUR 2 000 million,
the total amount of borrowings
which the Commission is empowered to contract on
behalf of the European Atomic Energy Community.

it

(5) Decision 77/271/Euratom should therefore be amended

accordingly.

Having regard to the proposal from the Commission,

HAS DECIDED AS FOLLOWS:

Sole Article

The sole Article of Decision 77/271/Euratom is replaced by the
following:

‘Sole Article

for

as provided

Loans
in Article 1 of Decision
77/270/Euratom may be contracted for amounts the total
principal of which shall not exceed the equivalent of
EUR 6 000 million.

When the total value of the transactions effected reaches
inform the
EUR 5 500 million,
Council, which, acting unanimously on a proposal from
the Commission, shall decide on the fixing of a new
amount as soon as possible.’

the Commission shall

Whereas:

(1) Council Decision 77/271/Euratom (2) provides that when
effected reaches
total value of
the
EUR 3 800 million,
inform the
Council which, acting unanimously on a proposal from
the Commission, shall decide on the fixing of a new
amount as soon as possible.

transactions
the
the Commission shall

(2) The total value of transactions effected is approaching the
figure of EUR 3 800 million, as provided for in Decision
90/212/Euratom.

(3) Decision 94/179/Euratom, has extended the scope of the
Euratom lending instrument to certain countries of central
and eastern Europe and of the Commonwealth of Inde-

(1) OJ L 88, 6.4.1977, p. 9. Decision as amended by Decision

94/179/Euratom (OJ L 84, 29.3.1994, p. 41).

(2) OJ L 88, 6.4.1977, p. 11. Decision as last amended by Decision

90/212/Euratom (OJ L 112, 3.5.1990, p. 26).