France announced it would nationalize its largest power company, EDF, for $8 billion on Tuesday to contend with the energy crisis plaguing Europe, Reuters reported.
France’s move to purchase its largest power company is the latest made by European policymakers to address the skyrocketing energy costs across Europe. European energy prices remain nine times more expensive than the United States, with one barrel of Liquid Natural Gas costing $55.00 in Europe compared to $9.00 in the U.S., according to Axios.
French authorities told Reuters that the government, which owns 84% share in EDF, would seek to take over the company through a public offer on the market to buy out the minority stock-owners at a premium, according to Reuters. The final price tag for the French could end up being as much as $10 billion.
Ben Lieberman, a senior fellow at the Competitive Enterprise Institute, told the Daily Caller News Foundation that Europe’s commitment to resolving climate change is partially to blame for the rising energy costs.
“A lot of the blame belongs to the climate agenda and the pursuit of the climate agenda by European nations,” Lieberman explained. “Coal, oil and natural gas are all more expensive and less available because of this agenda.”
The French government expects to finalize the deal in September, while the transaction will take place in December, according to Reuters.
Striking development! France will not be the last country to nationalize its energy system. The problems around energy security and pricing that elected governments face will likely require a period of nationalization. But rest assured, 10-20 years hence they will be privatized. pic.twitter.com/fXFz5csfP8
— Constance L Hunter (@ConstanceHunter) July 6, 2022
World leaders at the G-7 summit in June supported more natural gas and oil projects, according to a memo. The German cabinet will decide whether to reconnect coal-fired plants to the power grid as the Russian Nord-stream 1 pipeline will go offline for scheduled maintenance, Reuters reported.
European countries expanded the use of renewable energy sources, like wind and solar, at the expense of reliability, Lieberman noted.
Lieberman said the French buy-out is a scheme to exercise greater control over the free market and will add to the problem.
“I guess with nationalization, you can just mandate cheaper prices,” Lieberman explained. “But, the reality is that price is a signal that there’s a shortage. So you’re not really going to ultimately solve the problem until we can provide more energy to Europe and France.”
EDF did not immediately respond to the DCNF’s request for comment.
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