The German gas importer Uniper is facing a solvency crisis and has asked for federal support to avoid bankruptcy. Following the reduction of the gas flow from Russia, Uniper has been forced to buy additional gas on the open market at much higher prices to fulfill its contractual obligations towards customers. This, according to Uniper, has led to the company losing tens of millions every day. The German government is negotiating ways to support the struggling company, but faces several challenges along the way.
On July 8th, the German minister of economy, Robert Habeck (the Greens), announced that he “won’t allow a systemically important company to go bankrupt and consequently cause turbulence in the global energy market.” Prior to that, Uniper had applied for “stabilization measures” in the face of a looming financial collapse. Uniper proposed passing on the additional costs of gas to customers, an idea that appealed to the German government, who then extended it by suggesting that all energy users in Germany share the additional costs. Recent law changes have allowed the German government to intervene more quickly and drastically into the energy market than ever before.
But the entire burden may not be Germany’s to pick up. 78% of shares of Uniper belong to the conglomerate Fortum, which is majority-owned by the Finnish state. This led Robert Habeck to call upon the owners to take responsibility, since Uniper “belongs to somebody, who is solvent, and able to provide support.” Finland, however, showed no interest in investing more to bail out Uniper. According to Finnish Minister of Europe, Tytti Tuppurainen, the Finnish government considers having done its share with its investment in Fortum and, after pouring a total of €8 billion into loans and guarantees, doesn’t see any further reason for pouring more capital into Uniper.
Negotiating with the Finnish owners isn’t the only challenge for Habeck.
Uniper is currently involved in a lawsuit against the Netherlands for €1 billion over the planned closure of a coal plant scheduled for 2030. Similar lawsuits, covered by the Energy Charter, had affected Germany in the past: following the closure of the Swedish nuclear plants in the German city of Vattenfall, Swedish owners sued, and won. Habeck’s dilemma, however, is that the Netherlands have opted to shut down the coal plants in order to reach their climate goals, which otherwise would prove to be unattainable. If Uniper were to be nationalized, the German Green government might end up being involved in a lawsuit against the Netherlands for executing their climate protection measures.
Germany’s lawsuit against the Netherlands has been met with great resistance from the European Greens. Anna Cavazzini called upon the German government to withdraw the lawsuit, if possible. “It is absurd, that a German investor keeps the Netherlands from reaching the Paris climate goals,” said Cavazzini, “and it would be even more absurd if the government would support this blockade as an owner.”
Meanwhile, the third largest gas importer of Germany, the VNG Leipzig, is also struggling and may be in need of financial aid. At the current rate, large parts of Germany’s energy suppliers might be facing nationalization over the course of the coming months.
David Boos is an organist, documentary filmmaker, and writer for The European Conservative and other publications.