Scholz backs down on nationalization of former German Gazprom unit to avoid angering Putin — Bloomberg

German Chancellor Olaf Scholz has refused to fully nationalize the former German division of Gazprom because he does not want to irritate Russian President Vladimir Putin, Bloomberg reported, citing informed sources.

Economy Minister Robert Habeck insisted on full nationalization of Gazprom Germania, but Scholz rejected the offer. He worries that such a decision could anger the Russian president and exacerbate Russian gas supplies.

Instead, the German government took the sanctioned company into trusteeship until the end of September. Now they have decided to extend its term indefinitely.

Trusteeship means that the German energy regulator takes on the role of shareholder and will be able to take the necessary measures to ensure the company's supplies, but the German government does not become the owner of the company.

In addition, Gazprom's subsidiary is planned to be renamed Securing Energy for Europe GmbH. The company will also receive financial assistance — a multibillion-dollar loan to protect the company from bankruptcy. 9-10 billion euros is the quoted figure.

The German government believes that such actions maintain their impact on part of the critical energy infrastructure and "prevent the threat to energy security."

Background

Gazprom's German subsidiary owns energy supplier Wingas GmbH, and its Astora division manages Germany's largest gas storage facility in the north, in the town of Reden in Lower Saxony.

In addition to warehouses, Gazprom Germania has retailers in the UK and Singapore. The company is one of the leading sellers of gas and electricity in Europe, has offices in Asia and North America.