Germany nationalizes Uniper, UK details energy subsidies

The German government will own around 99% of Uniper and 8% of its Finnish parent company Fortune (FOJCF)German Economy Minister Robert Habeck told reporters in Berlin on Wednesday.

Uniper provides 40% of the country’s gas supply and is crucial for large companies and private consumers in Europe’s largest economy.

In July, Chancellor Olaf Scholz announced the government would step in to bail out Uniper with a package worth up to 15 billion euros ($15.3 billion), after it was brought to its knees by protesters. months of reduced Russian supply and soaring spot market prices.

As part of the bailout deal, the government pledged to provide 7.7 billion euros ($7.8 billion) to cover potential future losses, while state-owned bank KfW agreed to increase its credit facility by 7 billion euros ($7.1 billion).

But Habeck said the situation had “significantly worsened” since Russia cut gas supplies to Europe indefinitely through the Nord Stream 1 pipeline on September 1, citing an oil leak.

Russian gas had to be replaced with expensive alternatives, leading to soaring bills for consumers.

Although the gas supply via Nord Stream 1 is suspended, Germany’s gas reserves are filled to more than 90% of their capacity, European storage provider GIE AGSI+ said on its website.

Yet the European energy crisis is not going away.

Habeck said the country could “winter well” without Russian gas, but warned of “really empty” supply levels in the aftermath.

UK details business subsidies

Germany is not alone in paying a hefty price to overcome gas supply shortages. Together, EU states and the UK have already committed over $500 billion in aid households and businesses to help them cope with soaring energy prices.

The UK government on Wednesday gave further details of its plan to protect the economy through the coming winter. It said it would cap electricity and gas costs for businesses at less than half the market rate for an initial six-month period.

The announcement follows a pledge made earlier this month to cap average household energy bills at £2,500 ($2,834) a year for the next two years.

UK Finance Minister Kwasi Kwarteng said he would detail the overall cost of the program on Friday.

Analysts said the total bill could reach £150 billion ($170 billion). With tax cuts promised by new Prime Minister Liz Truss, this could send UK government borrowing skyrocketing at a time when debt repayment costs are rising and the pound is already is trading at a 37-year low as investors worry about the fragile health of the UK economy.

— Anna Cooban contributed to this article.