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EU Ready to Adopt Measures Over CEZ in Bulgaria

Published: April 29, 2013; 14:43 · (Vindobona)

Van Rompuy promised to take actions during his visit in Prague.

EU Ready to Adopt Measures Over CEZ in Bulgaria / Picture: © CEZ

According to reports by CTK on Friday, the EU is now prepared to adopt measures to stabilize the Czech power supplier’s position in Bulgaria. This was announced by Hynek Kmonicek, director of the President Office's foreign department. He said Czech President Milos Zeman took up the issue during President of the European Council Herman van Rompuy’s visit to Prague as he had the impression the issue has been politicized in Bulgaria. "We would like the EU to fulfil its role of the top supervisor on EU standards," Kmonicek declared.

Van Rompuy promised to address the problem. CEZ’s problems emerged after mass protests against the high energy prices started. The demonstrators demanded the nationalization of power providers in Bulgaria, which are owned by the the two Czech companies CEZ and Energo Pro, and Austrian EVN. The country-wide protests resulted in Boyko Borisov’s rightist government fall.

In February Bulgarian authorities started a process which could lead to depriving CEZ of its licence. The Czech Republic expressed their opposition to Borisov’s statements as only an independent regulatory office is able to make decisions on the licence. Power supplier CEZ claims not to have violated any Bulgarian or EU laws. At the end of March, CEZ filed a law with the EU Commission against Bulgaria. At the beginning of this year, the former Bulgarian government has withdrawn the licence from CEZ in the connection with the protests against high energy prices. The power supplier has also been withdrawn the licence in Albania and had to write off a total of $ 289m.

Petr Dokladal, manager of CEZ for Bulgaria, commented on the start of the proceedings and declared that the Bulgarian regulator is taking steps on the basis of purely formal mistakes. He expressed his hope for the proceedings, which are expected to take at least two months, to soon be stopped.

Komonicek emphasized that the main interest was to inform the EU about possible breaches of law. "We want the EU to know about the problem, which it does, and to be ready for action in case the matter markedly left the rules set for investment in the EU," Kmonicek said. He added it is not "within the EU rules" if the situation of an energy enterprise investing in Bulgaria becomes part of the country's pre-election struggle. "We are also speaking in this sense with Bulgarian diplomatic representatives here (Czech Republic)," Kmonicek, a diplomat until lately, said.

Only recently, EVN announced that the losses from July 2012 til Februar 2013 were amounting to € 60m. Moreover, the electric provider forecasts a further loss of € 40m for the second quarter of 2013. The reason for the financial losses is green energy. From July to February, EVN had to pay for the supply of green energy in advance, as is prescribed by law. On March 5, DKEVR announced a cut in energy prices of 7 %. Thus EVN is now receiving less than the company had actually paid for. EVN filed arbitral proceedings before the International Court of Arbitration against the state of Bulgaria.

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