Guaino says French public should not finance foreign investment mistakes

Henri Guaino, a top advisor to President Nicolas Sarkozy, told LeParisien newspaper that it would not be normal to make the French consumer pay for the foreign investments "mistakes" of state-run electricity company EDF. Guaino said that he was shocked by the comments of EDF Chief Executive Pierre Gadonneix, who called last week for a 20 % increase in state-set electricity tariffs.

Thus, the group's debt stood at 24.5 billion euros ($34.1 billion) at the end of 2008, up from 16.3 billion a year earlier following the acquisition of British Energy.

Gadonneix said a tariff rise was necessary to stop the company building up debt. Besides, he added that tariffs would be 40 % higher than they are if the state-owned group had been allowed to add the cost of inflation to its prices over the past 25 years.

Despite the fact that French electricity tariffs are between 15 and 30 % cheaper in comparison with those in neighbouring European countries, the government is keen to avoid hurting consumer budgets just as the economy is struggling to climb out of a slump.

The French press has speculated about the future of Gadonneix as the head of EDF following his comments. But a source close to the government told Reuters on Friday that there was no basis to the speculation.