Germany

The German government is planning to inject about 8 billion euros ($8 billion) into Uniper SE as part of a historic agreement to nationalize the gas giant in a push to stave off a collapse of the country’s energy sector, Bloomberg News reported. A provisional deal between Chancellor Olaf Scholz’s administration, Uniper and its main shareholder, Finland’s Fortum Oyj, has been reached and could be announced as soon as Wednesday. As part of the deal, Germany will buy Fortum’s 78% stake in Uniper and take full ownership of the German company.

German producer prices rose in August at their strongest rate since records began both in annual and monthly terms, driven mainly by soaring energy prices, raising the chances that headline inflation will surge even higher, Reuters reported. Producer prices of industrial products increased by 45.8% on the same month last year, the Federal Statistical Office reported on Tuesday. Compared to July 2022, prices rose 7.9%, it added. The surge was considerably stronger than expected, with analysts having forecast a 37.1% year-on-year rise and a 1.6% monthly rise, according to a Reuters poll.

Germany took control of the German business of Russian oil giant Rosneft Oil Co. as Berlin races to safeguard its energy supplies before its planned ban on Russian oil imports kicks in later this year, the Wall Street Journal reported. The German government said it would place Rosneft’s German subsidiaries under trusteeship. The business’s flagship asset is the PCK refinery in Schwedt, eastern Germany, that provides Berlin and the surrounding region with much of its gasoline and aircraft fuel.

Germany is in advanced talks to take over Uniper SE and two other large gas importers in a historic step to avoid a collapse of its energy market, Bloomberg News reported. State ownership of Uniper, VNG AG and Securing Energy for Europe GmbH, formerly Gazprom Germania GmbH, is the main solution under discussion, the people said. The government is considering buying Fortum Oyj’s controlling stake in Uniper for a nominal price and would then inject billions of euros into the company through a capital increase. That move would dilute the stakes of Uniper’s remaining outside shareholders.

The German government has sold off its 20% stake in Lufthansa acquired during the coronavirus pandemic, it said on Tuesday, Reuters reported. The state's economic stabilisation fund (WSF), which saved Lufthansa from bankruptcy during the pandemic with a bailout package totalling 9 billion euros ($8.97 billion), had progressively reduced its stake in recent years with the aim of offloading it completely by October of 2023. It has now sold its last remaining shares to international investors in a block placement for 455 million euros, the fund said in a statement on Tuesday night.

Germany is set to use a fund created to help companies cope with the economic hit from the pandemic to provide loan guarantees for struggling energy firms, Reuters reported. State development bank KfW would oversee the mechanism and the volume of loan guarantees available would be around 67 billion euros ($67.9 billion). Chancellor Olaf Scholz’s government is set to approve the plan -- which is designed to help energy companies forced to pay higher prices due to Russian supply cuts -- at a regular cabinet meeting on Wednesday.

Germany's outlook has "dramatically worsened" and the economy could stagnate or contract in the second half of the year, an economy ministry report said on Tuesday, Reuters reported. A rising number of companies are going insolvent but there is no "insolvency wave" as such, the report said, adding that Germany's labour market has defied global uncertainties for the time being and demand remains high. Read more.

Germany's justice minister is planning a temporary relaxation of insolvency rules to help keep afloat companies that have fundamentally sound business models but are struggling with debts due to high energy costs, he said on Friday, Reuters reported. Marco Buschmann, whose portfolio includes insolvency rules, said his plan would exempt firms from the obligation to file for insolvency if an expert finds they have a "positive going concern prognosis" for four months, down from 12 months now.

Germany imported goods from Russia valued at 2.9 billion euros ($2.95 billion) in July, according to data released on Monday, as elevated energy costs frustrated German efforts to wind down trade with Russia, Reuters reported. The value of German imports from Russia rose by 10.2% compared to July 2021, the Federal Statistical Office said. The office attributed the surge mainly to higher prices, particularly in the energy sector, as cuts to Russian gas deliveries drive up energy bills for households and businesses in Europe's largest economy.

German pilots at flagship carrier Lufthansa have agreed not to strike until mid-2023 under an initial wage dispute agreement that includes a 980-euro ($998.23) pay rise, both sides said on Monday, Reuters reported. During the truce period, which runs until June 30 next year, the union and the company aim to expand the deal into a broader agreement, Lufthansa said. Under the initial agreement, cockpit crews are to receive an increase in their basic monthly pay of 490 euros each in two stages, with retroactive effect from 1 August 2022, and as of 1 April 2023, VC said.