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Scholz Accuses Russia of ‘Blackmail’ Over Gas Pipeline Shutdown

Economy Sep 07, 2022 09:42
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(Bloomberg) -- Chancellor Olaf Scholz accused Russia of seeking to blackmail Germany and its European partners by shutting off gas deliveries and dismissed an apparent leak in a key pipeline as “pretense.”

“Russia could deliver if it wanted to,” Scholz said Wednesday, according to the text of a speech to the lower house of parliament in Berlin. He said Gazprom (MCX:GAZP) PJSC (OTC:OGZPY) simply needs to request a turbine for the Nord Stream 1 link that is in western Germany and ready for use after repairs.

“Russia does not want to deliver,” Scholz said. “Because it wants to blackmail us and our European neighbors with missing deliveries and high gas prices and drive us apart.”

Germany has been racing to fill gas storage facilities to prepare for the winter, but Gazprom’s decision not to reactivate Nord Stream after maintenance last week has raised the prospect of gas rationing this winter.

“We have to make ourselves independent of such an unreliable supplier as quickly as possible,” Scholz said. “This is needed for the security, independence and sovereignty of our country.”

In a wide-ranging speech to Bundestag lawmakers, the German leader pledged that his ruling coalition will do all it can to hold the country together during a coming “winter of challenges” while acknowledging that no government can “mitigate every hardship.”

Soaring energy costs and historically high inflation are hammering households and companies and Scholz reiterated a pledge that no citizen will be left to cope alone. The ruling alliance agreed at the weekend on a third package of aid measures worth 65 billion euros ($64.4 billion), taking the total amount of assistance to almost 100 billion euros.

It includes higher subsidies for lower-income households and cash payments to students and pensioners. The government has also thrown its weight behind a European Union effort to tax so-called  “windfall profits,” as surging earnings at some energy firms fuel public outrage.

“We will skim off these billions of dollars in chance profits,” Scholz said. “In this way, we gain scope to massively relieve the burden on citizens when it comes to electricity prices.”

Germany is in “intensive talks” with EU partners about implementing a cap on electricity prices, Scholz added.

“However, we are also prepared to take action at national level first, because we want to relieve the burden on citizens very quickly,” he said.

Speaking before Scholz, Friedrich Merz, the leader of the main opposition conservatives, accused Scholz’s government of mismanaging the energy and security crisis.

“Your government is lacking any compass,” Merz said. “Also in economic policy, this government is lacking any capability of politically strategic thinking.”

Scholz countered by accusing critics of stirring civil unrest, calling it “poison for our country at this time.”

“Citizens are not naive,” Scholz said. “But the federal government is doing everything to ensure that the citizens and our companies get through this difficult time together.”

©2022 Bloomberg L.P.

Scholz Accuses Russia of ‘Blackmail’ Over Gas Pipeline Shutdown
 

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