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Wednesday, 2 October, 2002, 10:00 GMT 11:00 UK
Belgium criticises British Energy aid
Dungeness B Power Station
British Energy provides one-fifth of the UK's electricity
Belgium has complained to the European Commission over an emergency government loan to British Energy.

Belgium has claimed that the 650m granted by the UK government to the struggling nuclear power company last week broke European competition rules.

Belgian Energy Minister Olivier Deleuze has, in a letter to the Commission, suggested that the financial help could distort the electricity market.

The UK's Department of Trade and Industry said it had notified the commission of the loan, and believed it complied with EU guidelines on state aid.

Breaking the rules?

The UK government last week extended its aid to British Energy for two months until 29 November and raised the loan from 410m to 650m.

The Belgian complaint said the aid measures taken or planned by the British government were "difficult to reconcile with the rules of free competition at the heart of the single electricity market".

Mr Deleuze told BBC Radio 4's Today Programme that he wanted the EU competition watchdog to investigate whether the deal broke EU aid regulations.

EU rules allow member governments to give financial help to floundering companies under certain conditions, such as the drawing up of a solid restructuring plan.

But last year, the EU rules stopped the Belgian government from giving financial help to the national airline carrier Sabena, which later went bust.

In the City, British Energy shares stood 1p firmer at 14p at 1000 GMT.

See also:

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