Arm wrestling between Finland and Germany amid energy shortages

Arm wrestling between Finland and Germany amid energy shortages

Efforts to find a solution to the financial problems of German energy giant Uniper are turning into a showdown between Helsinki and Berlin.

Finland’s Reforms Minister Tytti Tuppurainen is due to travel to Berlin on Thursday (July 14) to discuss the fate of Uniper, Germany’s biggest gas importer, as talks over its bailout heat up.

Uniper has been in crisis since Russia restricted its gas exports. Indeed, this situation forces it to buy gas from other sources in order to satisfy its customers, thus leading to daily losses of the order of several tens of millions of euros.

The company immediately applied for stabilization aid following the approval by the German parliament on July 8 of a revision of the energy security law. This revision modifies the way in which the State can financially support energy companies, through a addendum introduced at the last minute and colloquially referred to as “Lex Uniper”.

Uniper has already benefited from a credit line of 2 billion euros from the public bank KfW in order to protect its investment quality.

Uniper’s main shareholder, the Finnish energy company Fortum, also 51% state-owned, is a strategic company for the government of Helsinki which contributes to the state budget with approximately one half a billion euros per year in dividends.

German Economy Minister Robert Habeck insisted that Fortum provide more support to its subsidiary Uniper.

During an interview with the Finnish News Agency, Ms Tuppurainen recalled that Fortum had already given 8 billion euros to Uniper earlier in the year through financial arrangements. It would be difficult to get more support, and the primary responsibility lies with the German government.

At the same time, the Finnish Minister of Economy, Mika Lintilä, called “incomprehensible decision” the alignment of Germany with its anti-nuclear policy and the resumption of the use of coal.

Fortum’s former management has recently been heavily criticized for investing in Uniper.

During a debate on Tuesday (July 12) at the public debate forum Suomi Areenaall party leaders outside the government recommended a tough stance on Germany.

“The Finnish government should be very firm with Germany”said Petteri Orpo, president of the main opposition party, the National Coalition Party.

Party leaders have called on Prime Minister Sanna Marin to cut short her vacation and get back to work. According to the Prime Minister’s Office comment, Ms Marin had already been in contact with Chancellor Olaf Scholtz over the weekend.

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