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The former German government of Gerhard Schröder guaranteed a credit of one billion euros ($1.2 billion) for the Russian gas group Gazprom's Baltic pipeline project, a German daily reported in its Saturday edition.
Gerhard Schröder believes that there is no reason for him to hang his head in shame
A few weeks before Schröder stepped down as German chancellor following elections in September, his coalition of Social Democrats and Greens approved the billion euro ($1.2 billion) guarantee for Gazprom, the Süddeutsche Zeitung said.
The gas company has since named Schröder as head of its supervisory board.
The report comes after Schröder was voted in Thursday as head of the supervisory board of a consortium that plans to build the natural gas pipeline under the Baltic Sea from Russia to Germany. Gazprom holds 51 percent of the consortium's shares.
Schröder was sworn on to the supervisory board on Thursday
"While I was head of the government, I had no knowledge of such a proposition and therefore had nothing to do with it," Schröder said in reaction to the report, which has since been confirmed by a Finance Ministry spokesperson.
The Russian gas giant said in December that it would hire Schröder, sparking a controversy that several other reconversion bids had failed to ignite.
Opposition wants more details
Schröder's critics lambasted him for accepting the position.
"This affair stinks terribly," said Guido Westerwelle, head of the free market liberal opposition Free Democrat party, who has already been sued by Schröder for previous attacks about this affair. He also said he would seek to clarify the issue with a parliamentary investigation if needed.
Christian Wulff, a leader in current Chancellor Angela Merkel's Christian Democratic Union and Schröder's successor as head of Lower Saxony, said the revelations were "serious" and required an explanation from the former chancellor.
"If Schröder has any respect for himself, he must immediately resign his post on the supervisory board of the gas consortium," said Reinhard Bütikofer, a leader of the Greens party, which was in coalition with the Schröder government.
A German interministerial commission approved the credit guarantee on October 24, while Schröder was still head of the government, but just after the parliament's budget commission was informed of the deal, the newspaper said, quoting sources close to the new Merkel government.