A bad smell: opponents attack Schroeder over Gazprom link

3rd April 2006, Comments 0 comments

Ex-chancellor Gerhard Schroeder is under attack over his private links to the Russian energy group Gazprom. Guenther Voss reports.

Gerhard Schroeder is at the centre of a fresh storm over his private links to the Russian oil-and-gas group Gazprom, with critics asking whether he unduly favoured the company while he was German chancellor.

The questions resurged last week when Schroeder was appointed chairman of the committee of shareholders of the north European gas pipeline (NEGP), a project controlled by Gazprom.

It has now been disclosed that the Schroeder government offered to guarantee a loan to Gazprom by banks to start constructing the pipeline from Russia under the Baltic Sea to the German coast.

German opposition parties say Schroeder should give up his 250,000-euro-per-year (300,000-dollar-per-year) post with the company to demonstrate that he has clean hands, but the ex-chancellor insists he has done nothing wrong and is promoting Germany's best interests.

For ordinary Germans, it is hard to judge what it all means. Some critics merely say Schroeder, who retired from politics in November, was tactless to take on the job, and others contend there is a scandal, though evidence has not been produced.

As chancellor, Schroeder strongly backed the pipeline, despite criticism from eastern European nations which favoured a land route. The Kremlin and Gazprom are eager for Germany to be a long-term gas customer.

While Chancellor Angela Merkel's Christian Democrats, who are now allied with the Social Democrats in a federal coalition, have been moderate in their criticism of Schroeder, the small opposition parties have not.

*quote1*Schroeder has taken out a libel suit, seeking to restrain the leader of the opposition Free Democratic Party, Guido Westerwelle.

The ex-chancellor's former Greens allies have poured scorn on him, with party co-leader Claudia Roth accusing him of profiteering.

Commentators said Sunday there was nothing unusual about the German government offering guarantees for strategic investments.

But it was startling, they said, that the Schroeder government, which stayed on in a caretaker capacity after losing the September 18, 2005 election, should offer a guarantee at a time when its top officials were seeking new employment.

At the time, German banks were offering Gazprom a loans package, which was sweetened by an assurance that the German federal government would stump up 900 million euros plus interest if Gazprom defaulted.

This federal assurance was only a paper one, because the two banks, Deutsche and KfW, had not yet negotiated an actual loan.

Schroeder, who insists he was not aware of the guarantee offer at the time, says Gazprom, which is controlled by Russian President Vladimir Putin's government, has told him it has not and will not accept the loan.

"If there wasn't any loan, then there obviously wasn't any guarantee for it either," said Schroeder.

News reports say the guarantee offer was approved by a committee of civil-service heads.

A Sunday newspaper, Bild am Sonntag, said the Finance Ministry state secretary who cleared it through the committee was Caio Koch- Weser, who has since taken up a post advising Deutsche Bank.

On Sunday, federal sources said Schroeder's office was not represented at the October 24 committee meeting: only the Finance, Economy, Foreign and Aid Ministries were involved.

Sensing that all may not have been told, the opposition parties are now calling for a parliamentary inquiry. "There's a bad smell about the whole transaction," said the Free Democrats' Westerwelle.

3 April 2006


Subject: German news, Schroeder, Gazprom

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