Finland money

Germany and Finland at odds over Uniper bailout as gas supplies dwindle

The Uniper logo is seen at the company’s headquarters in Duesseldorf, Germany, July 8, 2022. REUTERS/Wolfgang Rattay

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BERLIN, July 9 (Reuters) – A dispute between Germany and Finland over the cost of bailing out gas importer Uniper (UN01.DE) erupted on Saturday when its biggest Finnish shareholder rejected an appeal by a German top minister asking for extra help to bail out the ailing company.

Uniper, Germany’s biggest importer and storer of gas, this week called for a bailout from the German government, warning that losses from reduced supplies from Russia and soaring gas prices could reach 10 billion euros ($10 billion) this year. Read more

But German Economy Minister Robert Habeck said Uniper’s biggest shareholder, Finland’s state-owned energy company Fortum (FORTUM.HE), should help with the rescue, as Germany faces an energy crisis. serious enough for Habeck to call for economy measures such as shorter showers for Germans.

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“It (Uniper) is owned by someone, someone who is solvent and can provide support,” Habeck, who is also energy minister, told Deutschlandfunk radio in an interview. “So it’s fair to consider models where owners also have an obligation.”

Fortum, which has proposed confining Uniper’s German operations to state ownership, replied that it had already given Uniper 8 billion euros in loans and guarantees.

“German security of supply companies must be owned by the federal state which has the required strong solvency” because gas prices could continue to rise, Fortum chief executive Markus Rauram said in a statement sent by email.

For Finland, whose economy is 13th the size of Germany and 15th in population, the challenge is serious.

“The rescue of Uniper is a matter of European importance.” Finnish Europe Minister Tytti Tuppurainen also said in an email. “We urgently call for Uniper’s system-critical and risky activities to be confined to Germany and secured by the state.”

After thriving on years of reliable flows of cheap Russian gas, Germany is struggling to contain the impact of these limited supplies.

While Russia blames technical problems, Western governments say they are pretexts and Moscow is reacting to crippling sanctions imposed for its invasion of Ukraine.

Germany has allocated 15 billion euros in public money to buy gas elsewhere to ensure gas storages are full by winter, but, urging the public to save energy, Habeck warned that if gas prices rise further, it may not be enough.

“Germans shower on average 10 minutes,” he said. “And I think even five minutes is too long.”

Already, some housing associations have said they will lower heating temperatures in their homes and apartments this winter, and Habeck said workplace heating could be reduced.

German Chancellor Olaf Scholz said in a video statement on Saturday that energy security issues would preoccupy Germany “for weeks, months and years to come”.

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Reporting by Markus Wacket and Matthias Inverardi; Written by Thomas Escritt; Editing by Emelia Sithole-Matarise and David Holmes

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