HomeWorldGermany nationalizes its largest importer of natural gas | CNN Business

Germany nationalizes its largest importer of natural gas | CNN Business

CNN Business

germany is nationalizing Uniperits biggest importer of natural gas, as part of an 8 billion euro ($7.9 billion) plan to stave off a power shortage this winter.

Europe has been hit by the rise natural gas Y electricity prices as a result of the Russian invasion of Ukraine and its throttling of gas supplies.

The German government will own around 99% of Uniper and 8% of its Finnish parent company Fortum.

German Economy Minister Robert Habeck told reporters in Berlin on Wednesday.

Uniper provides 40% of the country’s gas supply and is crucial to large companies and private consumers in Europe’s largest economy.

In July, Foreign Minister Olaf Scholz announced that the government would step in to bail out Uniper with a package worth up to 15 billion euros ($15.3 billion), after it was brought to its knees by months of Russian supply cuts and rising spot market prices.

Under the bailout deal, the government has pledged to provide 7.7 billion euros ($7.8 billion) to cover possible future losses, while state bank KfW has agreed to increase its credit line by 7 billion euros ($7.1 billion). ).

But Habeck said the situation had “worsened dramatically” since Russia indefinitely cut off gas supplies to Europe via the Nord Stream 1 pipeline on September 1, citing an oil leak.

Russian gas has had to be replaced by expensive alternatives, leading to skyrocketing bills for consumers.

Although gas supplies via Nord Stream 1 are suspended, Germany’s gas reserves are filled to more than 90% of capacity, European storage provider GIE AGSI+ said on its website.

Still, the European energy crisis will not go away.

Habeck said the country could “get through the winter just fine” without Russian gas, but warned of “really empty” supply levels in the aftermath.

Germany is not alone in paying a high price to overcome gas supply shortages. Together, the EU states and the UK have already committed over $500 billion in assistance to homes and businesses to help them cope with the high cost of energy.

The British government gave more details on Wednesday of its plan to protect the economy during the coming winter. It said it would limit electricity and gas costs for businesses to less than half the market rate for an initial six-month period.

The announcement follows a pledge made earlier this month to cap average household energy bills at £2,500 ($2,834) a year for the next two years.

UK Finance Minister Kwasi Kwarteng said he would detail the full cost of the program on Friday.

Analysts have said the total bill could reach 150 billion pounds ($170 billion). Coupled with promised tax cuts by new Prime Minister Liz Truss, which could wipe out UK government borrowing at a time when debt servicing costs are rising and the pound is already trading at 37-year lows while investors worry about the fragile health of the British economy.

— Anna Cooban contributed to this article.

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