GERMANY: Former chancellor Gerhard Schröder has denied organising a €1 billion state guarantee during his last weeks in office for his new employer, Russian gas monopoly Gazprom.
Last October, while Mr Schröder served as caretaker leader, Germany's economic ministry agreed to allow a state-owned development bank act as guarantor for a quarter of the cost of the €4 billion undersea gas pipeline from Russia to Germany, which is currently being built.
The revelation has increased criticism of Mr Schröder, already under fire for accepting a €250,000 a year job heading the supervisory board of the pipeline consortium just a month after leaving office last year.
"During my time in office I had no knowledge of such a proposal and was therefore never involved," said Mr Schröder of the loan guarantee. He later added that Gazprom "did not and will not accept this financing offer".
"If there wasn't any loan, then there obviously wasn't any guarantee for it either."
It was unclear yesterday when Gazprom rejected the German loan guarantee offer. The pipeline deal will come under scrutiny of a parliamentary budget committee on Wednesday.
This morning, lawyers for Mr Schröder will go to court seeking a permanent injunction against Guido Westerwelle, leader of the liberal Free Democrats (FDP), who has said Schröder's new job "stinks to high heaven".
"Mr Schröder will earn lots of money in the future from a position that wouldn't exist without his influence as head of government," he said yesterday.
Mr Schröder rejects any improper behaviour and has denied speculation that he accepted the board position in September, before leaving office.
"I was presented with this [ job] in November 2005 and initially refused . . . because I really wanted to concentrate on consulting and didn't want to make any firm career commitments," said Mr Schröder in Handelsblatt newspaper. He said he finally accepted the position at the request of Russian President Vladimir Putin. "I don't see anything wrong with that," he said.
Wolfgang Clement, the former economics minister, said the loan guarantee had "nothing in the least to do with Schröder".
The deal for the 3,000 km-long pipeline was signed last September in the presence of the German and Russian leaders and construction began in December.
The pipeline consortium is 51 per cent owned by Gazprom, with Germany's EON energy company and BASF chemicals giant each holding a 24.5 per cent stake.