Pribičević: Nuclear Policy as the Monetary Policy of the Future

writes: Vedrana Pribičević

When inflation becomes the main concern of every household, the political establishment begins to seek visible ways to respond to that pressure. Capping the price of Nutella speaks not only to the perception of rising living standards but clearly shows that the fight against inflation has become the central political struggle. However, while symbolic moves in supermarkets carry political visibility, structural inflation requires structural solutions. This is precisely what France understood in the early 1980s when, faced with inflation that had rooted itself in a wage and price spiral after two oil shocks, it resorted to the deepest structural policy a state can implement: a comprehensive transformation of energy sources.

The French nuclear plan transformed the country into an energy system almost independent of fossil fuel imports; during a period when European economies suffered strong price volatility, France had stable and predictable electricity production costs. This reduced variability within the consumer price index and mitigated the transmission of external shocks into domestic inflation, making energy transformation act as an anchor that supported monetary policy at a time when interest rates could no longer stabilize prices on their own.

Source of Macroeconomic Stability

Research has since confirmed the multiple favorable effects of decarbonization through nuclear energy on the economy: stable base electricity production reduces price volatility, weakens the transmission of shocks into inflation, and creates multipliers in industry, construction, and high-tech sectors. The construction and operation of nuclear facilities open long-term high-value-added jobs and encourage the development of domestic research and engineering capacities, making the energy sector a source of macroeconomic stability rather than just a technical issue.

An industry that has been conservative for decades is now one of the most dynamic areas of energy, with a boom in startups and a strong influx of venture capital funds into SMR technology. Small modular reactors introduce passive safety systems, automatic shutdown in emergencies, and modular construction that shortens timelines and reduces investment risks, while standardized design allows for faster construction, lower initial costs, and simpler maintenance. SMRs are therefore suitable for countries that do not have extensive nuclear experience but want stable, low-carbon, and predictable energy in conditions of increasing global uncertainty.

Croatia has recently liberalized its nuclear framework and reinstated nuclear studies, opening the space for the long-term return of expertise and industrial capacities to that sector. This is an important move as small open economies benefit the most from stable sources of base energy, as evidenced by the strong interest of several smaller European countries such as the Czech Republic, Estonia, Slovenia, and Slovakia, which see nuclear development as a key instrument for long-term macroeconomic resilience.

Timing is Crucial

However, timing is crucial: global demand for modular reactors already exceeds production capacities, and order books are filling up years in advance. Countries that want to secure a place in the next investment cycle must act quickly because this is not about an aesthetic choice of technology, but about positioning in the future energy architecture of Europe. At this stage, export financing systems offered by developed countries to partners play a key role. Common models include state guarantees, long-term loans with favorable terms, and risk-sharing between exporters and users. Such instruments are particularly developed by the United Kingdom, the United States, and Japan, whose financing mechanisms for high-tech infrastructure enable smaller economies to enter projects that would otherwise be fiscally unattainable. For Croatia, this means the possibility of secure and fiscally sustainable financing while simultaneously creating domestic technical and safety competencies. If France demonstrated 40 years ago that structural inflation can only be mitigated by structural policy, Croatia today has the opportunity to make an equally serious leap, as in a world marked by uncertainty, countries that control their energy will also control their inflation.