Germany has finalized a plan to bail out struggling energy firm Uniper, Chancellor Olaf Scholz confirmed on Friday, Deutsche Welle reported. The wholesale gas and electricity importer is threatened with bankruptcy over skyrocketing energy prices from the Ukraine war. Scholz told a news conference in Berlin that the government will take a 30% stake in the energy firm. He added that his administration would make up to €7.7 billion ($7.8 billion) available as hybrid capital and expand a credit line to €9 billion through the state-run bank KfW.

Germany is ready to make a decision on a bailout for Uniper SE “soon” but ongoing talks with the company are “difficult,” Bloomberg News reported. Uniper - which is heavily dependent on Russian gas - asked the German government for a bailout on Friday, the first major corporate casualty of Moscow’s squeeze on European energy flows. The government is prepared to help the company no matter what, said a spokeswoman for the government. Germany and Uniper have been locked in talks for weeks over a potential rescue package.

German lawmakers approved a measure on Thursday that will allow the government to throw a lifeline to companies struggling with the record-high price of gas and with cuts in supplies from Russia, the New York Times reported. The law, passed in the lower house of Parliament, is part of a wider package that aims to help Germany maintain the security of its natural gas supply as it faces shortages connected to Russia’s invasion of Ukraine. Last month, Russia cut the amount of gas delivered to Germany via the Nord Stream 1 pipeline, a major conduit, by 60 percent.

Germany is set to ditch its plan to return to strict borrowing limits next year if Russia stops natural gas deliveries to Europe’s largest economy for good, Bloomberg News reported. While Finance Minister Christian Lindner has argued that Germany and its euro zone peers must scale back public debt from 2023 to avoid the risk that more deficit spending could fuel historically high inflation, the governing consensus may be shifting.

Power prices in Europe surged on fears that Germany may soon start to limit gas-fired generation and concerns about limited availability of Electricite de France SA’s nuclear fleet, Bloomberg News reported. The German parliament will vote on legislation on Thursday allowing the government to curtail generation from gas plants not deemed to be essential for security of supply to conserve fuel. EDF warned this week that it may have to reduce output at some of its French nuclear reactors during the summer as a drought reduces the amount of river water available for cooling.

Germany's government will have the power to bail out utilities under proposed legislative changes approved by the cabinet on Tuesday, according to the economy ministry, Reuters reported. "The situation on the gas market is tense and unfortunately we cannot rule out a deterioration in the situation," Economy Minister Robert Habeck said in a statement. New amendments to the Energy Security Act will give the government additional tools to help utilities if they falter under rising energy prices as Russian gas imports decline.

For the first time in more than three decades, Germany has posted a monthly trade deficit, the most recent sign that Europe’s largest economy is facing stress because of interrupted supply chains and record energy prices linked to Russia’s war in Ukraine, the New York Times reported. Exports have been the economic engine in Germany for years, but the steep rise in the price of energy, driven by Russia’s moves to restrict the amount of natural gas it is delivering to Europe, has driven up the price of products made in Germany.

German gas giant Uniper SE is in talks with the government over a potential bailout package of as much as 9 billion euros, ($9.4 billion), Bloomberg News reported. The government is looking at applying a set of measures, including loans, taking an equity stake and also passing part of the surge in costs onto customers. Uniper declined to comment. The company, which is one of the biggest importers of Russian gas, said last week it was in talks with the government to secure liquidity. Its shares sank 28% on Monday, taking the company’s market value to 4.14 billion euros.

The German government on Friday offered to buy the insolvent MV Werften's Rostock shipyard for an undisclosed sum to turn it into a navy arsenal, a defence source said, in a move to top up the navy's capacities for repairing and servicing war ships, Reuters reported. Germany, in response Russia's invasion of Ukraine, has been scrambling to bring its military back in shape after decades of attrition following the Cold War.

Germany triggered the "alarm stage" of its emergency gas plan on Thursday in response to falling Russian supplies but stopped short of allowing utilities to pass on soaring energy costs to customers in Europe's largest economy, Reuters reported. The measure is the latest escalation in a standoff between Europe and Moscow since the Russian invasion of Ukraine that has exposed the bloc's dependence on Russian gas supplies and sparked a frantic search for alternative energy sources.