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Germany Changes Law To Bail Out Energy Firms Affected By Russian Invasion

 |  July 4, 2022

The German government will be able to buy stakes in energy companies buckling under the cost of soaring gas import prices, according to draft legislation seen by Reuters, as Berlin bolsters its defences in a deepening economic war with Moscow.

The amended law, which may come before parliament this week, could also allow the government to impose emergency levies on consumers, three sources told Reuters, though it was not clear how quickly it might exercise that right.

Chancellor Olaf Scholz’s government is scrambling to deal with the impact of soaring energy prices after Russia’s invasion of Ukraine, warning that utilities could face a “Lehman”-style collapse if they cannot pass costs on to consumers.

“We must brace ourselves for the fact this situation will not change in the foreseeable future, in other words – we stand before a historic challenge,” Scholz told reporters after meeting with trade union and employers association leaders to discuss the cost of living crisis.

Under the new energy proposals, the government would be able to take voting or non-voting stakes in companies related to critical infrastructure via the same mechanisms used to bail out companies during the coronavirus pandemic.

The amendments are currently being discussed among government ministries and could be presented to parliament on Friday.

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