Gazprom declines credit amid Schroeder row

3rd April 2006, Comments 0 comments

3 April 2006, MOSCOW/BERLIN - Amid a row over the appointment of Gerhard Schroeder at one of its subsidiaries, Russian gas monopolist Gazprom said Monday it would not now need a billion-dollar credit guaranteed by the German government under the ex-chancellor's tenure.

3 April 2006

MOSCOW/BERLIN - Amid a row over the appointment of Gerhard Schroeder at one of its subsidiaries, Russian gas monopolist Gazprom said Monday it would not now need a billion-dollar credit guaranteed by the German government under the ex-chancellor's tenure.

There was no need for such a loan by German banks for the construction of the North European Gas Pipeline (NEGP), a project under Gazprom's control, it stressed.

"Gazprom is the world's largest gas exporter and a first-class debtor and does not require state guarantees of credits," a company statement said in Moscow

Guarantees of the 900-million euro loan by Deutsche Bank and the government-owned KfW were extended last October while Schroeder served as caretaker chancellor before Angela Merkel took over, according to the Finance Ministry in Berlin.

The information stoked criticism of Schroeder's links with Gazprom, since he was a driving force behind the new pipeline project connecting Russian gas fields with western Europe.

The former leader was already under scrutiny for his acceptance of a job with an annual salary of 250,000 euros (301,000 dollars) in the Gazprom-controlled NEGP operating company.

Schroeder claims he had no knowledge at the time of the decision to underwrite the pipeline credit.

Under the arrangement, the German government would cover Gazprom's debt of the Russian company were to default on repayment.

A spokesman for Merkel's grand coalition government said Monday that the guarantee of the loan was found to be technically legitimate and that Schroeder's decision to take up employment with Gazprom was his personal business.

But critics at home including his former Greens allies accuse him of profiteering.

The gas pipeline is now under construction and will carry natural gas from Russia to Germany under the Baltic sea. The pipeline company is a joint venture between Gazprom and major German energy companies.

DPA

Subject: German news

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