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Germany will review the laws in order to support them



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The German government will have the power to take over stakes in utility companies and introduce emergency taxes on consumers, according to legislative changes that are currently being discussed, several government sources told Reuters.

German ministers are working on a package of measures to respond to the impact of high energy prices on electricity producers, with Economy Minister Robert Habeck recently warning that a “Lehman-type effect” could occur on suppliers facing explosive rising costs and at the same time it must fulfill its obligations to consumers.

According to sources quoted by Reuters, German officials have already begun talks with the utility group Uniper, Germany’s largest buyer of Russian natural gas, on a support package and Berlin wants to ensure that similar measures will be available for other companies, if needed.

German utility group Uniper revealed last week that it is discussing the possibility of benefiting from government guarantees, the expansion of credit facilities and even a possible takeover by the state of a stake.

Sources told Reuters that the Berlin government could take over a stake in Uniper only as a last resort and that it is preparing possible support measures for other similar companies through amendments to the energy security law.

Amendments to the law are currently being discussed among German cabinet ministers and could be tabled in parliament on Friday, sources said. The changes could also allow the government to quickly impose a special tax on consumer bills, as a way to transfer some of the rising energy costs more equitably, government sources added.

A possible intervention in support of Uniper could take the form of a pandemic aid package for Lufthansa, which was saved from bankruptcy thanks to nine billion euros in government support.

“The federal government would benefit from options similar to those in aid to Lufthansa,” a government source said.

Under the Lufthansa aid package, the German state obtained a 20% stake in the airline through the Economic Stabilization Fund, but did not receive voting rights. Also, Lufthansa could not take over other companies until it repaid 75% of the state aid, and shareholders and managers could not benefit from taxpayer aid, which means that the payment of dividends and bonuses was frozen. .

After decades of liberalizing the energy market, European governments are beginning to step in to support utility companies struggling with record prices, and at the same time protect consumers from rising utility costs. Several European energy suppliers have gone bankrupt in the last year, given that they had long-term contracts with customers and could not quickly transfer the price increase to them.

In an attempt to protect consumers from rising energy bills, governments have also turned to excessive profits taxes on oil and gas companies, subsidies and price reductions.