German government denies hiding nuclear indemnity deal

Sep 10, 2010, 15:09 GMT

Berlin - Facing a storm of protest, Germany's government denied Friday it had anything to hide over a top-level agreement between Chancellor Angela Merkel and power company bosses.

A record of the late Sunday agreement to indemnify the utilities if their costs escalate while they run their nuclear reactors for an average of 12 extra years was made public in Berlin on Thursday.

Opposition parties denounced it as 'dirty deal' and the respected anti-corruption organization Transparency International (TI) suggested the government had departed from the spirit of democracy.

'How can they win acceptance from large sections of the public for potentially painful decisions if they sit down with four bosses of nuclear corporations and let terms be dictated to them?' said Edda Mueller, chair of TI Germany, on NDR Info radio.

'There really is nothing to hide here,' said government spokesman Steffen Seibert. He said the government had never intended to keep the accord secret. 'I reject the idea that the chancellor misled the public.'

Merkel and her ministers made no reference to the indemnity before Thursday's disclosure. Media first gained wind of a possible indemnity from a casual remark Tuesday by an executive at one of the companies, RWE, Rolf Martin Schmitz.

Merkel's government had previously said it would claw back most of the windfall profits expected to be earned by the nuclear companies when reactor running times are extended past the current deadline of about 2022.

But it later agreed to scale back a fuel-rod tax and let the companies create a renewable-energy fund instead. The indemnity allows the utilities to dip into that fund if upgrading the reactors proves too costly or a future German government reneges on the tax.

Sigmar Gabriel, leader of the Social Democratic Party (SPD), said capping the upgrade expense at 500 million euros (640 million dollars) per reactor shifted much of the cost onto the taxpayer.

'This arrangement by the government with the energy industry is the opposite of parliamentary,' he said.

The four companies, Eon, RWE, EnBW and Vattenfall, will only have to pay fuel-rod tax between 2011 and 2016.