The EU cleared the final hurdle to nationalization.
(Photo: dpa)
Brussels The EU Commission has approved German billions in aid for the ailing gas importer Uniper, subject to conditions. The federal government can support the company with up to 34.5 billion euros, as the competition watchdog announced on Tuesday evening.
As expected, this involves a number of antitrust requirements that Uniper must meet. The required sales, which must be completed by 2026, come as a surprise — and larger than expected. Among other things, the hard coal-fired power plant Datteln IV on the Dortmund-Ems Canal, which only went into operation in 2020, has to be sold. The group also has to part with the gas power plant in Gönyu, Hungary.
In addition, according to Uniper, there is the entire business with district heating in Germany, the electricity business in North America without LNG and hydrogen and business with marine fuels of Uniper Energy DMCC in the Middle East. In addition, the group must sell various pipeline holdings and the 84 percent stake in the Russian Unipro.
The Commission had already approved the nationalization of the company under merger and antitrust aspects on Friday. The measure will allow Uniper to continue to supply its customers and help to avoid serious disruptions to the German gas market. According to Uniper’s mandatory notification, the so-called stabilization measures are to be implemented immediately. The conditions made are apparently accepted.
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According to the EU Commission, the German measure is specifically about 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.
Avoidance of domino effect on the gas market
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.
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.
>> Read also: EU Commission gives the green light for the Uniper takeover for the time being – CFO is leaving
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.
More: Uniper shareholders pave the way for nationalization.
