A ‘too big to fail’-moment for natural gas in Europe

Analysis of decision SA.103791 by the Commission to approve the German measure to recapitalise Uniper

On 20 December 2022, the European Commission (‘EC’) approved Germany’s state aid measure of EUR 34.5 billion to recapitalise Uniper by means of a capital restructure2 (‘the measure’ hereafter). A capital restructure involves changing a company’s mixture of debt and equity and is often considered in cases where there is a significant drop in share prices or when the bankruptcy of an undertaking is imminent. It has been argued elsewhere that the insolvency situation of Uniper was a result of regular market economic principles: there was a shortage of natural gas supplied to the market, which led to an increased price of the commodity3 . The EC decided this instance was different however, recognising instead that the insolvency of Uniper would cause a serious disturbance to the economy. This led the EC to approve the measure under Article 107(3)(b) of the Treaty o...

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Analysis of decision SA.103791 by the Commission to approve the German measure to recapitalise Uniper

1. The lead-up to the recapitalisation of Uniper

2. The general approach of the measure

3. The principles on which the measure was assessed

4. Analysis of the decision to approve the measure

4.1. assessing the necessity of the measure

4.2. assessing the appropriateness of the measure

4.3. assessing the proportionality of the measure

4.4. assessing the appropriateness to limit competition distortion

5. Conclusion