In the near future, the integrated electricity market will have a significant influence on national energy policies in Europe. Especially in the electricity sector national policies will have to take into account the increased international complexity, This article considers the case of a German nuclear phase-out in the context of the Internal Market for electricity in Europe. More specifically, it is assumed that German nuclear capacities will be completely dismantled by 2005, It is found that in the long term such a phase-out will only lead to a moderate increase in average generation costs, but will cause a substantial impact on the volume of carbon dioxide emission. Additionally, the costs of the nuclear phase-out are influenced by the degree of interregional competition allowed within Europe. In a competitive integrated market for electricity, the costs are significantly lower than in the current system with more or less closed regional electricity markets, These results were derived by simulations with EIREM, a large scale multi-period, multi-region linear programming model of the European power systems.