German government agrees to a multibillion-euro bailout for gas importer Uniper hit hard by the war in Ukraine

 

German Chancellor Olaf Scholz speaks during a press conference in Berlin, Germany, on July 22. (Markus Schreiber/AP)

Chancellor Olaf Scholz announced a multi-billion-dollar bailout to save German gas importer Uniper, which has been hit hard by gas supply cuts due to the war in Ukraine.

As part of the deal, the federal government will buy a 30 percent stake in Uniper, the country's largest Russian importer, and fund the company.

With gas supplies dwindling, Uniper had to buy more expensive gas from other sources in the market to fulfill its contracts, causing serious liquidity problems.

"No one is alone," Scholz said in announcing the rescue operation. "We can take on this year's and next year's problems and help if necessary."

German households will have to pay higher gas prices in the fall, Scholz continued.

"Everything is getting more expensive," the prime minister said. "Sooner or later everyone will feel it." Taxing consumers could lead to an increase of 2 cents per kilowatt-hour, which could amount to 200 to 300 euros per year for a family of four, Scholz explained.

"You'll never walk alone," Scholz added, announcing that Germany will launch welfare reforms in 2023.

The Prime Minister said there would be legal protection for low-income households struggling to pay their energy bills.

"As a country, as a company and as a citizen, we will do everything we can to get through this together so that no one is in a situation that is impossible for him or her," he said.