Coalition MPs back Gazprom stake in EON

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Coalition MPs back Gazprom stake in EON

Leading politicians from Germany's centre-right coalition are pushing to allow the Russian gas giant Gazprom to take a stake in the country's biggest utility firm EON as a way of guaranteeing future gas supplies.


In the wake of Chancellor Angela Merkel’s decision to phase out nuclear power by 2022, leading members of the pro-business Free Democratic Party (FDP) and Merkel’s own conservatives say such an investment would make economic sense for Germany.

“Without atomic energy, Germany in future has an even greater interest than before in gas supplies from Russia,” FDP economics spokesman Martin Lindner told business daily Handelsblatt.

The most likely form of any investment would be Gazprom to buy part of EON’s subsidiary Ruhrgas. This would stabilize the important German-Russian co-operation and safeguard affordable electricity prices for all of German industry, Linder said.

There would, he added, have to be a limit to any acquisitions by Gazprom.

“The boundaries of a takeover by Gazprom will however be the point where the largest German energy provider could lose its independence,” Lindner said.

Gazprom boss Alexei Miller has previously shown an interest in some of EON’s operations that EON itself wants to part with. Miller said that in particular he would look at a takeover of the subsidiary Ruhrgas, though he has said there are no actual offers currently on the table.

Joachim Pfeiffer, economy spokesman for the conservative Christian Democratic Union and its Bavarian sister party the Christian Social Union, also spoke out in favour of allowing such a takeover.

“Kneejerk rejection of an entry by Gazprom through EON is irrational,” he told Handelsblatt.

Gazprom has for years operated a successful joint venture with German chemicals firm BASF, called Wingas.

“Should Gazprom grow larger in the energy sector, that could also profit the German economy. With the accelerated exit from nuclear power, gas can and will have to play a greater role in the guarantee of a stable supply security for the German economy,” Pfeiffer said.

Earlier this week, Merkel’s cabinet approved the planned phase out of nuclear power by 2022 at the latest, in response to the disaster at Japan’s Fukushima plant following the earthquake and tsunami there.

A source in the federal Economy Ministry said the legal status of a multi-billion euro takeover of any part of EON by Gazprom would be looked at carefully.

“Should the intentions of Gazprom firm up, the (competition watchdog) the Bundeskartellamt and the ministry would very closely examine the legal competition side,” the source said.

The remarks came as the energy firm RWE stepped up the pressure on Merkel over the quick nuclear exit. CEO Jürgen Großmann sent a letter on Sunday to Merkel protesting against the phaseout and criticising her policy on several fronts, according to Tuesday’s Financial Times Deutschland.

Given industry’s opposition to the quick nuclear exit, the pro-business FDP is battling to represent the views of its natural constituency. The party’s general secretary, Christian Lindner distanced himself on Tuesday from the plan to exit by 2022 and warned their conservative coalition partners about possible compensation claims by the energy companies.

The coalition was “not pure FDP policy,” he told the daily Kölner Stadt-Anzeiger.

“There is whole range of non-market instruments that we have to accept here for reasons of the coalition,” he said.

The Local/djw


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