The debt priority area for the future CEO of EDF Reuters

future CEO of EDF has a priori a clear but complex task to perform: to reduce debt, put the group at the heart of energy policy directly controlled by the Elysée and negotiate sensitively future rate increases.

Except surprise, the state should offer Sunday night during a board of directors to replace the current president Pierre Gadonneix by Henri Proglio, now president of the utilities group Veolia.
Henri Proglio, which is already on the board of EDF, a group still controlled almost 85% state, however, should officially take office until after the term of his predecessor, November 22 next .
"The main problem is the financial situation. The debt is increasing significantly," he told Reuters in an industry source familiar with the matter, who requested anonymity.
"The history of EDF shows that the company is never dead, but decisions must be taken to contain it."

The group's net debt increased from around 19.7 billion euros to the arrival of Pierre Gadonneix in 2004 to 36.8 billion euros in late June (cons 24.5 billion end 2008), this in particular because of Redemption for 12.5 billion pounds (15.8 billion euros) in the UK nuclear operator British Energy. According to Reuters Estimates Thomson I / B / E / S, produced from a forecast of 16 analysts, net debt could reach 44.8 billion end 2009 and 47 billion in late 2010.

The electrician public in late December also reached an agreement to acquire 49.99% stake in the U.S. Constellation Energy Nuclear Group, for 4.5 billion dollars (3.1 billion euros).

ACCELERATING THE ASSIGNMENT PLAN?

The French group is also faced with significant investments to upgrade the distribution network and maintain the fleet of nuclear plants. To reduce debt, the current chairman of EDF, Pierre Gadonneix, has announced a five billion euros of asset sales by 2010. Nothing, however, said that his successor will stick there and it will not decide a larger program, left to take drastic measures.
According to an administrator of the group representing the employees interviewed by Reuters, the change of direction could allow EDF to waive Constellation, ready to spend hundreds of millions of euros in penalties to settle the adventure. The new president could also yield a new tranche of capital of British Energy, which has already sold 20% to Centrica Plc for 2.5 billion euros, a discount of 6% over the purchase price.

"An easing of the interest in British Energy would be appreciated by the UK and Europe since offer wider access to nuclear generation," stressed Julien Benhamou and Stéphane Lacaze, analysts at Oddo Securities, in our recent EDF. "Sometimes it costs to do a little housekeeping," also emphasizes the industrial source.

The group could also give the partial distribution of electricity UK - representing almost 80% of the results of EDF Energy - or part of RTE, the transmission network of French electricity. This last option, however, raise an outcry union, even though Henri Proglio has a bias in favor of social dialogue.. But my feeling is that the state is not favorable. This is an issue which has dragged on for several months and does not, "observes one source of .

REVITALIZE THE ENERGY CHAIN

The change of CEO at the head of EDF is also in the context of the reorganization of the French energy sector, which is one of the priorities of industrial policy of Nicolas Sarkozy. "For this, we must increase cooperation between all actors of the French sector, EDF, GDF Suez, Areva or Total," says one. A consortium of GDF Suez, Total and Areva, which EDF would agree to build new generating plants EPR UAE illustrates this approach.

To this list, Henri Proglio seems to add Veolia, which would, according to Les Echos, transform governance to retain the chairmanship of the supervisory board. Also according to the newspaper, EDF could mount a capital of Veolia under mounting around the joint subsidiary of Dalkia energy services. .

The future president of EDF will also have a narrow scope to negotiate higher tariffs for electricity, an unpopular topic among consumers / voters French. Pierre Gadonneix, which said that the departure is not totally foreign to his recent statements about rate increases, it is broken teeth.

"President of EDF, this is not really a job alone," spear-t-on the same source.

Switzerland reduced its debt by 13 billion francs to 117 billion between 2005 and 2009

Switzerland has managed to reduce its debt despite the economic downturn. In late 2009, it has decreased by 13 billion francs compared to 2005, to rise to 117 bn, said the Finance Department on Tuesday. For comparison, the debt ratio in industrialized countries of the G20 represents approximately 2.5 times that of Switzerland. It is approximately 100% of GDP, against 40% in Switzerland. This positive development is linked to the budgetary discipline of the debt brake at the federal level, and the decline of the debt of the cantons and communes.

The public debt of France flies

The public debt of France has increased from 61.1 billion euros in the second quarter 2009 to reach a new record of 1 428 billion, or 73.9% of gross domestic product (GDP), according to data released Wednesday by the 'INSEE.


The public debt of France has increased from 61.1 billion euros in the second quarter 2009 to reach a new record of 1 428 billion.
Record government debt of France flies
Facts A budget recovery marked by deficits
Lighting Local taxes: the French will pay for the effects of the crisis
Infographic Tax Rate: large regional disparities
The government made the front wall of the deficit
In "milk strike", the French dairy farmers gathered throughout France for spreading operations of milk in the fields.
Zoom Milk producers maintain the pressure, despite advances
While the 2009 harvest is plentiful, the fall in exports of French wines uneasy occupation.
Facts To sell their stocks, winemakers are calling for sites selling online
Chronicle "Breakingviews" Good news, oil exploration is back
Decryption Gold regains its status as a safe haven

This percentage represents an increase of 3.5 percentage points from the end of the first quarter, when gross debt under the Maastricht amounted to 1 366.9 billion or 70.5% of GDP. Reflecting the widening deficit budgetary and fiscal stimulus, the state debt has increased from 54.6 billion euros in the second quarter to $ 1 135.4 billion, said the INSEE a statement.

Besides government debt, public debt under the Maastricht Treaty takes account of the social security funds (41.7 billion), local governments (141.1 billion) and government bodies Central (ODAC 109.8 billion). The debt of social security funds has widened to 7.7 billion euros while the government has declined to 1.7 billion, a movement comparable to that observed in the second quarter of previous years, said INSEE .

The debt figures of Maastricht in the first quarter were revised down sharply due to the reclassification of the Company to finance the French economy previously classified in a variety of agency headquarters and now outside the scope of government following a decision by Eurostat published July 15.

The debt will reach 84% of GDP in 2010

If the deficit is expected to soar this year to 8.2% of GDP, remaining at that level throughout 2010, the debt of France, she is estimated to grow wiser. The latest government forecast, which could appear in the "guidance document public finances" presented Wednesday with the draft budget for 2010 assume a debt of 77.1% of GDP in 2009 and 84% in 2010. This increase will put the debt of France to record levels, but it is not very far from the previous government forecast which projected 77% and 83% in 2009 and 2010 respectively. One explanation for this relative resistance is the low level of interest rates which borrows the France market, only slightly higher than Germany, which limits the weight of interest, also called "debt burden . But financial markets could end up worrying about this situation: on the basis of a GDP of around 2,000 billion euros in debt 84% equivalent to some 1,700 billion euro ...

The unbearable burden of debt

Quebec lives on the line of credit. This gives the illusion of some wealth, but Taking is never far away. Looks like someone bipolar after a frenzy of spending out of control, he invariably finds himself in a depressive state where he must find as quickly as possible the billions who will balance its budget.

Between 2003-2004 and 2009-2010 budgets, the government Increased its spending program (services to the population) from 45 billion to 60 billion dollars. We are talking about a 33% increase in expenditure is four times the growth of the economy. This pace is unsustainable, especially as only 18.8 billion dollars were withdrawn from the current government to find directly on the debt. The 42 billion dollars in Quebec plans to spend 2013-2014 to boost the economy will also Widen its debt, Which we must add about $ 4 billion deficit by year accumulate by then. The debt then represent half of the Quebec economy, an alarming level.

The fiscal position is also near a precipice. In 2013-2014, the government will spend $ 8 billion more for its expenditure program this year and the debt service will reach 9.4 billion dollars, 3.3 billion more. Make your accounts: this is additional expenditure of almost $ 12 billion. In his last budget, the government has submitted a very cheerful view of the situation. The fight in the black, the increase of costs of government services and the increase in QST in 2011 should fill $ 8 billion. Even in this version euphoric, missing 4 billion.

The reality is that we need additional revenues of 12 billion or decreases in comparable cost within four years. This command spectacular in a society where the state is seen as benevolent, omnipotent and untouchable. Quebecers will have to bear in mind that debt is a cruel trap that destroys all their ambitions and Undermine all their energies.