The EU Commission has approved German billions in aid for the ailing gas importer Uniper. The federal government can support the company with up to 34.5 billion euros, as announced by the competition watchdog. The Commission had already approved the nationalization of the company under merger and antitrust aspects on Friday. This clears the way for nationalization.
The measure will allow Uniper to continue to supply its customers and help avoid serious disruption to the German gas market.
Specifically, according to the EU Commission, the German measure involves an immediate capital increase of eight billion euros. In addition, a further capital increase of up to 26.5 billion euros is planned until 2024.
Uniper has gotten into trouble because of the Russian gas supply stop, as prices have multiplied. The company has to buy the missing gas from Russia at a higher price on the market in order to fulfill old supply contracts, which leads to liquidity problems.
Uniper supplies hundreds of municipal utilities and major customers
The wholesaler, which used to be heavily dependent on Russia, is a supplier to around 500 municipal utilities and around 500 other major industrial customers. Uniper's bankruptcy would probably have triggered a domino effect that would also have caused difficulties for numerous customers.
If an energy supplier fails, municipal utilities usually step in. However, since Uniper counts these regional basic suppliers among its customers, they too would falter. They would have to source the natural gas elsewhere at higher prices. The costs passed on would in turn burden millions of households and many companies.
State aid is subject to European rules. The EU Commission, as the guardian of fair competition, checks whether it is discriminating against the market. For example, if Germany were to subsidize a certain company so heavily that it could force a competitor from another country out of the market, this would not be compatible with EU competition law. The competition rules are also intended to ensure that no monopolies arise that could arbitrarily increase prices.