Germany will not allow any of its energy companies to go bankrupt, Economy Minister Robert Habeck told Bloomberg, as German gas and power providers struggle with low Russian gas supply and sky-high prices of non-Russian gas.
"This is the promise I can give: we will not allow one company to go bankrupt and let, as a consequence, the global energy market get into turbulences," the minister told Bloomberg in a phone interview on Wednesday.
German industry and energy companies are on high alert as Russia slashed supply via Nord Stream in the middle of June and is expected to begin regular two-week maintenance on the key gas pipeline to Germany on July 11. Germany, Europe's biggest economy, and other EU member states are not ruling out the possibility that Russia may not resume gas flows via Nord Stream once the maintenance period is over, or it could cut supplies further.
According to Habeck, the German and global energy markets could see "cascading effects" due to energy companies scrambling to buy very expensive gas on the spot market in order to compensate for low Russian supply.
Moreover, there is now the distinct possibility of no Russian supply at some point later this year. Gas providers and buyers in Germany have been struggling with surging prices of non-Russian gas, which is severely burdening their finances.
Last week, energy giant Uniper, one of the largest customers of Russia's Gazprom, said it had initiated talks with the German government on possible measures to stabilize its finances amid low Russian gas deliveries and soaring gas prices.
Germany is currently amending its energy security law to allow the government to take stakes in struggling energy firms or impose levies on consumers. The government is discussing amendments that could be put for Parliament discussion as early as this week.
"With the new legislation, we will have different possibilities to act, but we will definitely act," Habeck told Bloomberg.
By Michael Kern for Oilprice.com
More Top Reads From Oilprice.com:
Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More