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Uniper storage in Bierwang
Photo: LENNART PRICE / AFP
Over the past few days, Chancellor Olaf Scholz has tended to be admired in hiking trousers and a Gore-Tex T-shirt – functional clothing that is ideal for a holiday in the Allgäu.
On Friday afternoon, Scholz suddenly stood in the chancellery in a dark suit and tie, looked serious and had brought a big message with him, for which he had come back to his office from the mountains: "You'll never walk alone," he announced briefly after twelve noon.
This statesmanlike staging should not be a coincidence, just as little as the English language in which he packed this message.
It seemed as if Scholz wanted to create a moment like the then head of the European Central Bank, Mario Draghi, who saved the common currency at the height of the euro crisis in 2012 with one sentence: "Whatever it takes".
The famous football anthem, according to which nobody is left alone, is to a certain extent the social-democratic version of this sentence.
Scholz not only announced the rescue of a gas company, but also a new relief package for the citizens.
Scholz gave the jerk speech that many have been asking him for weeks.
A perseverance slogan, with which the federal government is also trying to get back on the offensive.
After weeks in which Russian President Vladimir Putin played cat and mouse with the West with his war of aggression and reduced gas supplies, as Scholz Vice Robert Habeck (Greens) put it on Thursday.
The specific reason was the announcement that the federal government wants to save the energy company Uniper.
With a state stake of 30 percent, a mandatory convertible bond worth up to 7.7 billion euros and another loan from the state bank KfW of up to seven billion euros.
This is intended to prevent the collapse of the Düsseldorf group, which controls around 60 percent of German gas imports.
Because the company bought mainly in Russia and now has to buy the replacement for the missing deliveries at horrendous costs on the spot markets, Uniper was threatened with insolvency - and with it the so-called Lehman Brothers effect - as well as the collapse of the US investment bank , which started the meltdown on the financial markets in 2008.
For this reason alone there was a touch of history about this spontaneous press conference in the foyer of the Chancellery.
What do Scholz's announcements mean - both for the company and for the citizens?
Uniper – a rescue in installments
For Uniper, the deal is a rescue in several steps:
As a
first step
, the state wants to ensure that international rating agencies continue to classify Uniper as creditworthy and that the company does not run out of money this summer.
Bankruptcy must have been imminent.
According to government circles, it was “a matter of days”. Hence the participation of the federal government, hence the additional loan commitment from KfW – and the prospect of money from the convertible bond.
With the bond, the federal government can lend the company up to 7.7 billion euros, depending on its needs.
However, Uniper would not repay this loan with money, but the federal government would receive additional shares in return.
This could mean that the federal government would (at least temporarily) hold more than 30 percent of Uniper.
A
second phase
will begin for Uniper in October or possibly as early as September .
Then importers like Uniper should be able to pass on 90 percent of the additional costs incurred in purchasing gas to customers.
Uniper would have wished for this earlier.
"Unfortunately, it was impossible to agree with the German government," CEO Klaus-Dieter Maubach told analysts on Friday afternoon.
Chancellor Scholz initially had to prepare the population for the fact that a further increase in gas prices was imminent.
Even if the situation at Uniper should then calm down in autumn, there will still be challenges for the company and its new minority shareholder Bund: Uniper will have to restructure gas trading in such a way that the group will no longer be dependent on Russian supplies in the future.
In addition, Uniper has so far operated large gas and coal-fired power plants in Russia.
The company would like to get rid of this business, but this is hardly possible during the war.
On top of that, Uniper has a stake in nuclear power plants in Sweden – a deal that is at odds with the federal government’s previous nuclear phase-out policy.
In return for the rescue, the federal government is also demanding concessions from the Uniper Group and its shareholders.
The Finnish group Fortum, which joined Uniper in 2018 and has since increased its stake, will no longer hold 78 percent of Uniper shares in the future, but initially only around 56 percent.
Uniper should also no longer pay dividends for the time being, as agreed with the federal government.
The board of directors will not receive any bonuses for the time being.
What the Uniper rescue means for the citizens
For the collapse of the gas company, which has now been prevented, the taxpayers not only have to pay a good 15 billion euros.
Gas customers are also directly involved in this.
From October 1st, maybe even as early as September 1st, Uniper will be able to pass on the majority of its horrendous gas procurement costs to its customers, who are still paying the old prices from the long-term contracts.
These are many large companies, but also municipal utilities that supply millions of households.
The federal government has decided to distribute this avalanche of costs on the basis of the recently amended Energy Security Act with a surcharge.
The price difference between the high spot market prices and the cheap customer contracts should be largely compensated for by Uniper.
Not only Uniper's customers should pay the necessary sum, but it should be raised by all gas customers in Germany.
This takes the form of an additional network fee, for which Chancellor Scholz has named a sum of around two cents per kilowatt hour of gas.
According to the Chancellor, this amounts to 200 to 300 euros for a household.
That doesn't sound like much at first, but it adds up to gas prices that have already doubled or tripled.
And that's why Scholz announced this Friday: "We will do everything necessary to get the citizens through this crisis."
A new relief package, which is now the third party of the federal government, is intended to help.
According to Scholz, this includes a housing benefit reform that will come into force at the beginning of next year and that “should also include a higher flat-rate heating fee”, according to the head of government.
Students would benefit from this.
Scholz also mentioned the planned introduction of citizen income, which is to replace Hartz IV from January.
Tenants who find themselves in financial difficulties due to the high energy costs are also to be legally protected.
Concrete things will be negotiated in the coming weeks, and further help could then be added.
He wanted to send out "a strong message," said the Chancellor.
It is not yet possible to estimate how strong the relief will be in the end.
There are still many details that the government has to negotiate over the summer, especially the specific amounts of money.
However, Scholz will have to be measured by his slogan, according to which no one is left alone.
It is already clear that the government will concentrate its aid measures very specifically on those with low incomes.
The SPD and the Greens have thus prevailed in the traffic light coalition because they are moving away from the watering can principle.
In the previous relief package, the coalition put a large proportion of the money into a fuel discount.
But such broad measures must no longer be financed in the long term.
Therefore, when asked, Scholz also indicated that he could not imagine extending the tank discount.
There was also no talk of a further increase in the commuter allowance, as Federal Finance Minister Christian Lindner from the FDP had brought into play this week.
This measure would also relieve financially strong people and cost a lot of money - although according to Lindner there is currently no more leeway in the household.
With the rescue of Uniper, the federal government has also saved the German gas market for the time being.
That should be reassuring for the citizens - even if it will be even more expensive for them in the future.
The same applies to the economy threatened by recession.
Thousands of companies would have been affected in the event of a Uniper disaster because they would no longer have been able to get the gas they urgently needed for their production.
What has not yet been resolved with the Uniper rescue: Whether there will be enough gas to distribute in the coming winter so that the citizens have warm rooms and the industry can continue.
At least some gas has been flowing through the Nord Stream 1 pipeline since Thursday.
And on the same day, Vice Chancellor Robert Habeck presented a new package of measures intended to reduce consumption in Germany.
This put the federal government back on the offensive, at least in terms of communication.
And given the drama of the current situation, that's not so little.