Germany's opposition FDP party has threatened to demand a parliamentary inquiry into the so-called "pipeline affair" involving the former government of Gerhard Schröder and Russian gas group Gazprom.
Schröder and Putin signed the pipeline deal in September
Following a report in the Süddeutsche Zeitung newspaper over the weekend about the approval of a billion euro ($1.2 billion) credit for Gazprom's Baltic pipeline by former Chancellor Schröder's government, FDP opposition party energy expert Gudrun Kopp said she would fight for a parliamentary investigation. "There's something fishy about the whole matter," she told the Bild daily. Schröder's government approved the Gazprom credit just weeks before Schröder stepped down from government after elections in September.
The Green party, with whom Schröder's Social Democrats (SPD) formed a coalition in government, has also not ruled out a parliamentary inquiry. "You just can't do something like that," said Green party economics expert Matthias Berninger. Berninger said he was interested in discovering who else knew about the billion-euro loan guarantee.
Loans must be approved before gas can flow
Bodo Ramelow, deputy head of the Left Party parliamentary group, said his party is reviewing legal action that could be taken against members of Schröder's SPD-Green government should more damaging details emerge. "We could be talking about the misappropriation of tax money here," Ramelow said.
Even Schröder's own party has criticized the former chancellor's actions. "You just can't ignore it when someone has messed things up," Garrelt Duin of the SPD told Die Welt newspaper.
Russian newspaper Nezavisimaya Gazeta wrote on Monday that "Gerhard Schröder's business relationship with Gazprom is looking more and more unsavory... The image of the most important joint energy project for Europe is suffering as a result."
On Friday, Schröder officially took up the post as head of the supervisory board of a consortium that plans to build the natural pipeline under the Baltic Sea from Russia to Germany. Gazprom holds 51 percent of the consortium's shares.
Schröder has since defended his decision to head the board following criticism of alleged imprudent behavior.
Schröder said he was only offered the supervisory board post, for which he will earn an annual salary of 250,000 euros, after he left office in November. "I cannot see anything wrong with that," he said.
A still-optimistic Schröder
He also told the Handelsblatt business daily he had been unaware his (former) administration had guaranteed the credit Gazprom's pipeline. He added that Gazprom had no plans to take the loan. "I did not know about these proceedings," he said.
"But the key point is that Gazprom has already said that it has not and will not accept the financing option put forward by the banks. Thus, there will not be a federal loan guarantee for the two German banks," he added.
The economy ministry confirmed Saturday that an inter-ministerial commission rushed through a "decision in principle" on Oct. 24 last year while waiting for a new coalition to be formed by now Chancellor Angela Merkel.
Schröder also told Handelsblatt that: "Federal loan guarantees are a tried and tested instrument to defend the economic interests of our country," he said. "That especially includes a reliable supply of natural resources for German industry."
Schröder seems to have gained the upper hand in another battle as well. He has repeatedly sued Guido Westerwelle, head of the Free Democrat (FDP) party, for verbal attacks about the Gazprom affair. On Monday, following an appeal by Schröder last week, the Hamburg District Court barred Westerwelle from making further comments about Schröder's supervisory board position.