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ENERGY

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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UKRAINE

Scholz and Macron meet in Berlin to mend Ukraine rift

German Chancellor Olaf Scholz was set to receive French President Emmanuel Macron in Berlin on Friday after tensions between the leaders blew out into the open over differences on how to support Ukraine.

Scholz and Macron meet in Berlin to mend Ukraine rift

After a clear-the-air meeting in the chancellery, the pair will be joined by Polish Prime Minister Donald Tusk for urgent consultations on further European military backing for Kyiv.

Ukraine has faced a series of battlefield setbacks in repelling Russian troops, as its forces have faced critical shortages of ammunition and aid from Western allies has stuttered.

A massive US aid package of $60 billion (55 billion euros) remains blocked in Congress by right-wing Republicans, and President Joe Biden has acknowledged that $300 million of stopgap support announced Tuesday was “not nearly enough”.

It falls to Paris, Berlin and Warsaw “to mobilise all of Europe” to provide Ukraine with fresh aid, Tusk said.

But simmering disagreements between Macron and Scholz threatened to undermine cooperation between the allies.

Debates between France and Germany “may have culminated in what we have seen in the last weeks, but there have been difficulties for quite a long time now”, said Nico Lange, an analyst for the Munich Security Conference (MSC).

‘Calculated effort’

The summit of the so-called Weimar Triangle of European powers in Berlin was a “good sign that finally… the errors are corrected to some extent”, Lange said.

Germany’s European partners have been frustrated by Scholz’s refusal to provide its long-range Taurus missiles to Ukraine, despite urgent calls from Kyiv.

OPINION: Germany’s timid strategy risks both Ukraine’s defeat and more war in Europe

The chancellor, on the other hand, reacted angrily to Macron’s refusal to rule out sending troops to Ukraine and his pointed comments urging allies not to be “cowards”.

With his comments, the French president sought “to restore a certain level of strategic ambiguity” to complicate Russian President Vladimir Putin’s decision-making, said Jacob Ross from the German Council on Foreign Relations (DGAP).

As well as provoking a debate on where to draw the line on help for Ukraine, the remarks may also have been a “calculated effort” to rally Eastern European allies, Ross said.

But the pressure from Macron has also shone a spotlight on glaring differences with Scholz.

German soldiers participating in the conflict is “a limit that I, as chancellor, do not want to cross,” he told parliament on Wednesday.

This applied not just to the deployment of army personnel in Ukraine but also to any potential operational planning in Germany, he said in outlining his reasons for refusing to supply Taurus missiles.

At no point should German soldiers help select “where will be targeted… where will be hit”, Scholz said, a service he has suggested French officials provide to Ukraine for the long-range Scalp missiles supplied by Paris.

Macron remained combative late Thursday when he told French television a Russian victory in Ukraine “would reduce Europe’s credibility to zero”, insisting that the continent’s security was “at stake”.

Warning allies against imposing limits on assistance, he added: “If the situation should deteriorate, we would be ready to make sure that Russia never wins this war.”

And he said anybody advocating “limits” on aid to Ukraine “chooses defeat”.

READ ALSO: France ‘ready’ to ensure Russia ‘never’ wins Ukraine war

‘Different opinions’

Despite their differences, Scholz said he and Macron had a “very good personal relationship” as shown by their frequent consultations.

“The strength of the cooperation comes particularly from the fact that we do this even when both countries have different opinions on individual issues,” Scholz said.

Friday’s meeting is of “great importance” for allies to “organise as much support as possible for Ukraine”, said Scholz, who spoke Thursday with Ukraine’s President Volodymyr Zelensky by phone and underlined Germany’s “unbroken solidarity” with Kyiv.

Germany has been Ukraine’s single largest backer after the United States, but European efforts to mobilise support have faced challenges.

The EU is pushing to bolster weapons and ammunition production by its defence industry, but with the war in its third year, it is still struggling to ramp up output.

Poland has been one of Ukraine’s staunchest allies, and the presence of Tusk, a seasoned politician who served as European Council president, would help “moderate differences” in French-German relations, Lange said.

On Ukraine, it was in the overarching interest of both to “move closer together,” he said.

By Sebastien ASH

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