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ENERGY

Uniper rescue to cost Germany an extra €25 billion euros

Troubled gas giant Uniper on Wednesday said the German government would need to spend an additional €25 billion under a planned nationalisation to stave off the firm's collapse in the wake of Russia's war in Ukraine.

Uniper headquarters in Düsseldorf
The Uniper headquarters in Düsseldorf. Photo: picture alliance/dpa | Federico Gambarini

The German government agreed in September to nationalise the debt-laden company after Moscow’s closure of a key gas pipeline and sky-high energy prices left Uniper facing bankruptcy.

But the initial €8 billion cash injection from the government “will not be sufficient to stabilise Uniper”, the company said in a statement.

Another capital increase to the tune of €25 billion will be needed to help cover “the enormous additional costs of the Russian gas cuts that continue to be primarily borne by Uniper”, CEO Klaus-Dieter Maubach said.

The revised figure comes after Berlin scrapped a controversial plan to make German consumers pay a gas levy to help importers cope with rising prices, which would have covered some of Uniper’s costs.

READ ALSO: Germany reaches deal to nationalise troubled gas giant Uniper

The government will finance the rescue out of a €200 billion “special fund” designed to cushion the impact of the energy crisis on households and businesses.

Uniper said it would ask shareholders to formally approve the rescue deal on December 19th.

As Germany’s biggest gas importer, Uniper has been hit especially hard by the fallout from the Ukraine war, which forced it to buy gas at significantly higher prices on the open market.

It has reported a €40 billion net loss for the first nine months of the year, one of the biggest losses in German corporate history.

Germany’s government stepped in to save the company on fears that its collapse could endanger gas supplies and wreak havoc on Europe’s biggest economy.

Germany, which was heavily reliant on Russian gas imports before the war, has raced to find alternative suppliers and fill reserves before the colder winter weather arrives.

The country announced last week that its gas storage facilities were 100 percent full.

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GERMANY AND RUSSIA

Scholz urges Putin to withdraw troops for ‘diplomatic’ end to war

German Chancellor Olaf Scholz on Friday pressed Russia's President Vladimir Putin to seek a diplomatic solution to end his war in Ukraine, including troop withdrawals, Berlin said following a call between the two.

Scholz urges Putin to withdraw troops for 'diplomatic' end to war

“The chancellor urged the Russian president to come as quickly as possible to a diplomatic solution including the withdrawal of Russian troops,” according to the German leader’s spokesman Steffen Hebestreit.

During the one-hour call, Scholz “condemned in particular the Russian airstrikes against civilian infrastructure in Ukraine and stressed Germany’s determination to support Ukraine in ensuring the defence capability against Russian aggression”.

On Russia’s end, Vladimir Putin told Scholz that Moscow’s attacks on Ukraine’s infrastructure were “inevitable” and accused the West of pursuing “destructive” policies. 

“It was noted that the Russian Armed Forces had long refrained from precision missile strikes against certain targets on the territory of Ukraine,” the Kremlin said in a statement following the discussion. 

The leaders also discussed the issue of global food security, which is under pressure because of the war.

They also agreed to “remain in contact”, said Hebestreit.

Scholz and Putin have been in regular phone contact through the war.

The previous call between them took place in September and lasted 90 minutes, with Scholz then also urging Putin to “come to a diplomatic solution as possible, based on a ceasefire”.

‘Return to the pre-war peace order’

Despite his firm line on the war in Ukraine, the Chancellor drew sideways glances this week after telling the Berlin Security Conference there was a “willingness” to solve common security issues with Russia. 

“We can come back to a peace order that worked and make it safe again if there is a willingness in Russia to go back to this peace order,” Scholz said, according to reports by Times correspondent Oliver Moody. 

Scholz had prefaced his comments with a reference to Russia’s “imperialist” tendencies, which he said reflected the approach of the 17th, 18th and 19th centuries, “where a stronger country just thinks it can take the territory of a neighbour, understanding neighbours as just hinterland, and some place they can give rules to be followed.”

“That can never be accepted,” he added. 

He also blamed Russia for destroying the European peace order that countries had worked on “for decades”. 

Nevertheless, commentators accused the SPD politician of stubbornly sticking to Germany’s historical appeasement of Russia rather than recognising the realities of the present day. 

On Wednesday, German MPs also passed a motion to recognise the starvation of millions of Ukrainians in the 1930s under Russian dictator Joseph Stalin as ‘genocide’. 

Parliamentarians described the move as a “warning” to Russia as Ukraine faces a potential hunger crisis this winter due to Moscow’s invasion.

READ ALSO: Germany recognises Stalin famine in Ukraine as ‘genocide’

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