Federal Government buys stake in Uniper energy company
The Federal Government has bought a stake in Uniper, Germany’s largest gas trading company. At a press conference on Friday, Federal Chancellor Scholz said the Federal Government was aiming to take a stake of around 30 percent of the company. “No one in this country will be left to face these challenges and problems alone: not one single citizen, and the same goes for businesses in this country,” stressed the Federal Chancellor. “You’ll never walk alone. We’ll do whatever is necessary for as long as necessary.”
A maelstrom of high global market prices
The energy supplier Uniper finds itself faced with major difficulties because the gas it has ordered from Russia is not being supplied. The company must therefore purchase gas at much higher prices on the global market. “This has created a difficult situation for the company,” said the Federal Chancellor.
Federal Chancellor Scholz said the measures put in place would help the company get back into a position where it was on a stable basis to take the investment decisions, purchasing decisions and all other decisions necessary for it to continue trading.
In addition to the stake now held by the Federal Government, a 2 billion euro loan to Uniper provided by KfW has been increased to 9 billion euros and the designated purpose has been extended.
Stabilising critical infrastructure
The Federal Government intends to stabilise Uniper, which is essential to gas supplies, and thereby protect critical infrastructure. Critical infrastructure includes all businesses that carry out essential work to ensure supply security. Regulations of this kind have already proved their effectiveness in stabilising the economy following the coronavirus pandemic.
The basis for this is the new Energy Security Act, which makes it possible to implement stabilisation measures to protect companies like Uniper. The Act allows for restrictions to be eased temporarily, so that the Federal Government can quickly acquire stakes in companies if they apply for support.
Federal Chancellor Scholz stressed that Uniper was of “overriding significance” for development in Germany as a supplier of energy to citizens and to many businesses. Uniper supplies gas to many municipal utilities in Germany.
Shouldering the burden of high energy prices together
Going forward, it is important for gas importers like Uniper to be able to pass on the majority of the costs of procuring replacement gas when imports from Russia fail. In addition to this, legal options for a levy mechanism under the Energy Security Act are to be used, at the latest from October 2022.
In order to mitigate future energy price rises (including those caused by a levy), the Federal Government has agreed on further relief measures for citizens. The Federal Chancellor stressed that these would not end with the 30 billion euro relief package that has already been adopted.
Housing benefit and citizens’ basic income planned
As a means of providing further relief from high energy prices for citizens with low incomes, the Federal Government is planning reforms to housing benefit that will come into force on 1 January 2023.
The citizens’ basic income that was included in the coalition agreement will also start at the beginning of next year. The Federal Government is currently discussing the details of how to develop the previous form of basic income for job seekers (known as Hartz IV).
The Federal Government also plans to review termination protection rules to prevent tenants from having their rental or energy supply contracts terminated. The Federal Chancellor also pledged that Germany would remain stable, overcoming the challenges caused by Russia’s war of aggression against Ukraine.