Germany weighing bailout of energy giant Uniper — reports
July 20, 2022
The German government is looking at taking up to a 30% stake in utility firm Uniper, Reuters news agency and German newspaper Handelsblatt reported Wednesday.
What do we know about the bailout package?
Uniper is Germany's largest importer of Russian gas. The German government may intervene to save the company, amid the threat of reduced gas supplies by Russia and soaring prices, according to the reports.
Sources told Reuters that the company may pass on some costs to German consumers in the framework of the rescue package. A German government spokesperson said Berlin is working on a deal to save the company, but would not provide further details.
Handelsblatt, citing a paper from the Federal Minister for Economic Affairs to the German parliament, said Berlin plans to quadruple the credit line to the firm from €2 to €8 billion ($2 billion to $8 billion) via public lender KfW.
Finnish energy firm Fortum is the largest stakeholder in Uniper. Fortum would like the German branch of the business to be outsourced and taken over by the German government.
Uniper's CEO said earlier the company would not be able to last much longer in the current economic climate. The company is burning money as it is forced to buy supplies from alternative sources, as Russian gas firm Gazprom cuts deliveries.
German Chancellor Olaf Scholz could announce details of the bailout on Friday, according to Reuters.
The preparations to rescue Uniper come as the EU warns Russia could cut off gas to Europe completely this winter, with European Commission President Ursula von der Leyen calling it a "likely scenario."
"Russia is blackmailing us. Russia is using energy as a weapon. And therefore, in any event, whether it's a partial, major cut-off of Russian gas or a total cut-off of Russian gas, Europe needs to be ready," von der Leyen said Wednesday.
Germany criticizes reduced Russian gas deliveries via Nord Stream 1
Germany is heavily reliant on Russian gas. In June, 26% of gas consumed by Germany was imported from Russia, according to German Economy Ministry statistics released Wednesday.
Most recently, Russia cut off gas deliveries via the Nord Stream 1 pipeline, citing the absence of a Siemens gas turbine that was undergoing repairs in Canada. Germany said Wednesday the missing turbine is a an "excuse" to reduce gas deliveries.
The Nord Stream 1 pipeline is set to go back online on Thursday, with Russian leader Vladimir Putin saying Moscow will fulfill its delivery obligations.
wd/wmr (Reuters, AFP, dpa)