Energy | Mykkänen of the Kokoumus: Marin should buy a plane ticket to Berlin and go to negotiate with Uniper: “You can’t throw in the towel”

The coalition chairman of the parliamentary group Kai Mykkänen demands that Prime Minister Sanna Marin quickly get her EU card and go to Germany to negotiate on Uniper’s rescue package.

“You should put hard against hard,” says Mykkänen. The state owns the majority of Fortum, and Fortum owns the majority of the billion-loss German energy company Uniper.

According to Mykkänen, according to the latest information, it seems that Germany is about to betray the agreement negotiated by Fortum, Uniper and Germany in July.

According to information from various news agencies, Germany may not allow Uniper to transfer 90 percent of the production prices of the gas it sells to German customers from the beginning of October, as it promised back in July.

Read more: Germany is having trouble sticking to the Uniper agreement, says Minister Tuppurainen: “The harsh truth has dawned on everyone”

Read more: Germany is already getting rid of the second main condition of the Uniper agreement – can pay Uniper and Fortum four billion more

According to Mykkänen, Finland must be ready to even sue Germany if necessary. That is not the task of the Minister of Ownership, but of the Prime Minister, he says.

I will mute according to the core question is whether Finland accepts that the German authorities did not agree to raise the energy emergency to the third level, which would have made it possible to raise prices.

Germany has therefore not allowed Uniper to raise the gas price it charges its customers at the same pace as the gas price rises.

Now Uniper is making billions in losses because, according to German law, it has to sell gas at a huge loss to customers. German politicians have not wanted to raise the price of gas because it is a political risk.

According to Mykkänen, Germany is acting in violation of the European Energy Charter approved by the EU countries and the competition rules.

According to him, Germany could have acted like Finland, which does not massively regulate prices but supports those who have problems with electricity bills.

The European Energy Charter was agreed in the 1990s so that Western companies would dare to invest in Eastern Europe without fear that the countries would make the investments unprofitable by changing the laws.

Mute says that one option is to solve the problem according to the rules of the energy charter.

According to the agreement, disputes between states are resolved through diplomatic channels and, on a case-by-case basis, through the courts. For investors, disputes are settled by a court, dispute resolution procedure or international arbitration or mediation.

A suspected violation of EU competition rules could possibly be taken to the EU court. Its task is to deal with actions brought by the Commission or a Member State against another Member State based on the fact that the Member State has not complied with its membership obligations.

In opposition The coalition has been demanding the government to use the EU card since July, but according to Mykkänen it is still not too late, but more important than ever, because Germany is playing such a tough game.

“Of course, it would be a process of years, but this would create pressure that Germany should look for a fairer solution with Finland. I guess Germany doesn’t want to be judged for acting contrary to the market economy.”

So do you believe that Finland is able to influence the German authorities and internal legislation?

“Of course I’m not saying that this is one by text message can be turned to another position, but I think it is wrong to give up the fight on this fundamental issue. I believe that Germany would have been more willing to seek a compromise if they were afraid that their actions would be considered against EU rules,” says Mykkänen.

“Minister of owner guidance Titti Tuppurainen (sd) has said that it is Germany’s internal decision how the country applies its laws. It’s not quite like that. However, we are bound by international agreements. In this case, they should protect that the authorities of the investment target are not able to arbitrarily transfer billions of losses to the neck of the foreign investor, as has happened here.”

I will mute it is clear that the deal made in July was poorly negotiated.

“Inevitably, it comes to mind that the German Ministry of Economy has been thinking about weakening Uniper’s profitability with strict rules for a long time. And then, when its value is zero, the company is nationalized. That’s what happens here if nothing changes. The towel must not be thrown in the ring.”

Read more: Bloomberg: Germany is far along in the negotiations for the nationalization of Uniper and two other gas companies

Has the government thrown in the towel?

“I am concerned about the fact that Tuppurainen said a week ago that we cannot challenge German national legislation.”

In the future, does Finland have to assume that Germany always cheats?

“Don’t indulge in so much pessimism now. We have enormously good cooperation on the economic and political side. Yes, this teaches that the game is hard. In Germany, it is viewed through national interests. Then you have to be able to challenge, even though Finland is small.”

Should Tuppurainen and Marin break up?

“Even better, Marin should buy a plane ticket to Berlin and go negotiate with Uniper. He needs to contact the EU and ask if the internal market investment protection papers have been torn up, when Germany can not implement them.”

Mute suspects that Uniper is acting against the wishes of its main owner in Germany.

“It was quite an alarming sign that Fortum denied in its stock exchange release that there are now no negotiations on transferring Uniper’s majority to Germany, but a moment later Uniper puts out a stock exchange release saying this. It seems that the management at Uniper relies on the German government and plays against the majority owner.”

Fortum’s the problems stem from massive wrong decisions made between 2008 and 2017.

In those years, the coalition was on duty in every board responsible for controlling Fortum’s ownership. Mykkänen himself was a minister at the time when Fortum decided to acquire Uniper.

Shouldn’t the coalition have read the Uniper terms properly at the time and acted so that this dirty laundry would not have to be washed with billions of euros?

“These have been the company’s investment decisions. It’s good to think in retrospect how contradictory the impossibility is when all owners should be treated the same, even though the majority of the company is owned by the state. In the future, there must be a more clear reason,” says Mykkänen.

“I don’t want the parliament to start voting on the investments of state-owned companies, but we can consider whether a mechanism should be created by which the state would more closely monitor that state-owned companies implement the strategy defined by the state.”

Read more: Fortum’s takeover of Uniper seems to end just as it began: Information is leaked to the media and Fortum’s negotiating position crumbles.