March 12, 2015 / 9:34 PM / in 2 years

EU blocks Hungary's 12 billion euro nuclear deal with Russia: FT

(Reuters) - The European Union has backed Euratom's decision to block Hungary's 12 billion euro nuclear deal with Russia, a move that could worsen the situation between the Kremlin and Brussels, the Financial Times reported.

The decision, which was not made public, was taken at a meeting in Brussels last week, the newspaper said.

Hungary requested that Euratom, the European Atomic Energy Community, revive the decision, the newspaper said, citing people close to talks.

Russia and Hungary agreed last year to build two units with 1,200 megawatts capacity at Hungary's Paks nuclear power plant, a decision that was criticized by opposition parties.

Hungary, which relies on Russia for most of its gas and oil imports, agreed for a deal with Russian state-owned nuclear company Rosatom to build the units.

Blocking the deal would put a hold on Hungary's plans to import fuel exclusively from Russia. Hungary will now have to negotiate a new fuel contract or pursue legal action against the commission, the newspaper said.

"If the Russians now refuse to modify the original contracts, this will be the end of the road for the project,” said Javor Benedek, a Hungarian member of the European Parliament's Green group, the newspaper reported.

The newspaper said the commission launched a probe into the deal after Budapest awarded the bulk of contracts for two reactors to Rosatom without a public competition.

The European Commission, Euratom and Rosatom could not be immediately reached for a comment.

Hungarian government spokesman Zoltan Kovacs could not immediately comment when reached by Reuters.

Reporting by Rishika Sadam in Bengaluru; and Leslie Adler

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