PARIS, July 28 (Reuters) - The French government will not move ahead with a restructuring of power group EDF (EDF.PA) in the near future, unions and sources close to the matter said on Wednesday, making it all but impossible to pass a reform bill before President Emmanuel Macron's term ends in 2022.
The reform, involving a broad restructuring of the group and the mechanism through which it sells nuclear power, was supposed to help debt-laden EDF flourish as it competes with rivals investing in clean energy.
Despite backing from Macron, who came to power in 2017 and tasked EDF bosses with designing the outline for a new group structure, the overhaul has been caught in wrangling with the European Commission and has come under fire from unions.
The CGT union, which has been involving in consultations on the restructuring, said it had been informed the state would back away from pursuing legislation "in the short term".
One government source said France was no closer to being able to submit a draft law to parliament, at a time when the legislative windows to get it through are narrowing.
September would be one of the only viable moments before the presidential election next spring to get a law done, parliamentarians have previously told Reuters, while sources close to the matter have flagged the reform was likely now dead until at least 2022. read more
"Substantial progress has been achieved in our discussions with the European Commission. But to date, we have not reached an overall agreement," the government source said.
"Given that, it cannot be envisaged that we would submit a law to parliament if the main principles are not covered in a prior agreement," said the source, who spoke anonymously.
A source close to EDF did not confirm if the reform was canceled for good before the presidential election, but said talks with the Commission would run on for a long time.
EDF, due to report first-half earnings on Thursday, declined to comment.
The French government - which owns nearly 84% of EDF - needs EU clearance to make sure a new structure would not amount to state aid or crimp competition, in a power market still largely dominated by the former monopoly operator.
The reform envisaged placing EDF's profitable renewables business in a different entity so it could flourish, unburdened by the debt-laden nuclear assets.
Another key plank of the overhaul involved higher price guarantees on the nuclear energy EDF sells to third-party providers, helping the utility cover production costs.
If the reform is not launched before the election, that could disappoint EDF shareholders as well as investors more widely, as it was part of the business-friendly changes Macron promised early in his term.
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