Uniper rescue to cost Germany an extra €25 billion euros

Troubled gas giant Uniper on Wednesday said the German government would need to spend an additional €25 billion under a planned nationalisation to stave off the firm's collapse in the wake of Russia's war in Ukraine.

Uniper headquarters in Düsseldorf
The Uniper headquarters in Düsseldorf. Photo: picture alliance/dpa | Federico Gambarini

The German government agreed in September to nationalise the debt-laden company after Moscow’s closure of a key gas pipeline and sky-high energy prices left Uniper facing bankruptcy.

But the initial €8 billion cash injection from the government “will not be sufficient to stabilise Uniper”, the company said in a statement.

Another capital increase to the tune of €25 billion will be needed to help cover “the enormous additional costs of the Russian gas cuts that continue to be primarily borne by Uniper”, CEO Klaus-Dieter Maubach said.

The revised figure comes after Berlin scrapped a controversial plan to make German consumers pay a gas levy to help importers cope with rising prices, which would have covered some of Uniper’s costs.

READ ALSO: Germany reaches deal to nationalise troubled gas giant Uniper

The government will finance the rescue out of a €200 billion “special fund” designed to cushion the impact of the energy crisis on households and businesses.

Uniper said it would ask shareholders to formally approve the rescue deal on December 19th.

As Germany’s biggest gas importer, Uniper has been hit especially hard by the fallout from the Ukraine war, which forced it to buy gas at significantly higher prices on the open market.

It has reported a €40 billion net loss for the first nine months of the year, one of the biggest losses in German corporate history.

Germany’s government stepped in to save the company on fears that its collapse could endanger gas supplies and wreak havoc on Europe’s biggest economy.

Germany, which was heavily reliant on Russian gas imports before the war, has raced to find alternative suppliers and fill reserves before the colder winter weather arrives.

The country announced last week that its gas storage facilities were 100 percent full.

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German government set to scrap gas and electricity price caps

Price freezes on gas and electricity sold in Germany will terminate on December 31st, following a ruling from the country's Constitutional Court. 

German government set to scrap gas and electricity price caps

Price caps on gas and electricity in Germany will be “terminated at the end of the year”, according to the country’s Finance Minister. 

The announcement, made during an interview with Deutschlandfunk radio on Friday, means consumers are likely to see their energy bills go up, from the current limit of €0.40 per KwH for electricity and €0.12 per KwH for gas.  

The prize freeze was introduced last year to help consumers and businesses deal with rising prices triggered by the war in Ukraine. As recently as November, the Bundestag had agreed to extend the price cap through to March 31st. 

It was financed through the €200 billion Economic Stabilisation Fund (WSF), initially set up by the Government to help companies and pay for public health measures following the outbreak of the Coronavirus pandemic. 

The VAT reduction that the Bundestag had agreed for gas heating by the end of March is also in danger of being cancelled. 

Why are price caps ending?

The German Constitution limits budget deficits to 0.35 percent of GDP. This so-called ‘debt brake rule’ can only be circumvented in exceptional circumstances and was suspended during the pandemic. 

Earlier this month the Constitutional Court ruled that Chancellor Olaf Scholz’s government had acted illegally by allocating funds initially earmarked for the pandemic response to climate sending. 

Following this shock ruling, a spokesperson for the Chancellor said “all special funds will now have to be looked at and assessed.”

What has been the reaction? 

The SPD, one of the major parties in Germany’s ruling coalition, has criticised the move to end the price freezes. 

“With the price brakes, we are giving millions of households and companies security against excessive energy prices,” said deputy parliamentary group leaders Matthias Miersch and Verena Hubertz. 

Kerstin Andreae, Chairwoman of the Executive Board of the German Association of Energy and Water Industries (BDEW), also called it a “wrong decision”.

“For the coming winter months, an extension would be an important signal of stability and security to consumers,” she told

The German Federation of Consumer Organisations (VZBZ) said  that the “current chaos surrounding the federal budget” should not be at the expense of consumers. “Private households will therefore face significantly higher prices,” said Executive Director Ramona Pop.