German cabinet backs possible nationalization of energy firms

German Economy and Climate Change Minister Habeck at news conference in Berlin
German Economy and Climate Change Minister Robert Habeck gestures during a news conference on measures to reduce the carbon dioxide emissions and Germany's dependance on Russian energy imports amid the Russian war on Ukraine, in Berlin, April 6, 2022. REUTERS/Christian Mang/File Photo

BERLIN, April 25 (Reuters) - Germany's cabinet on Monday approved a legal amendment that would enable the government to seize ownership of energy companies as a measure of last resort to secure supplies in the event of an emergency.

Germany, which is heavily dependent on Russian energy, last month triggered an emergency plan to manage gas supplies in view of worsening relations with the Kremlin over its invasion of Ukraine and retaliatory western sanctions.

That was the first step in a three-phase plan that could result in energy rationing, with priority given to households and critical infrastructure such as hospitals.

"Prices are high, uncertainty is high and risks are on hand," Economy Minister Robert Habeck said in a statement. "We must therefore be ready for the situation to worsen."

The amendment would enable the government, which is racing to reduce Germany's dependence on Russian imports, to place energy companies under trust administration should energy security be threatened.

It already adopted that strategy with Gazprom Germania a trading, storage and transmission business abandoned by Russia's Gazprom (GAZP.MM). read more

Berlin hopes parliament will pass the amendment in May, a government source said.

Russia says it is conducting a “special military operation” in Ukraine to demilitarise its neighbour.

Reporting by Christian Kraemer; Writing by Sarah Marsh; Editing by Bernadette Baum

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