Speaking to the press following an extraordinary EU summit on Sunday (1 March), Merkel said that the Nabucco gas pipeline must not be subsidised with public money.
There is no need for financial support for Nabucco as there are no shortage of private investors, she said. The problem with Nabucco is where the gas will come from, not where the investment will come from, Merkel added.
Germany has long been suspected of seeking to prevent Nabucco from becoming an EU project. As a net contributor to the EU budget, it would be expected to provide the lion's share of the estimated eight billion euro required to build the pipeline. Moreover, Germany appears to doubt the feasibility of the project should the pipeline fail to link up with Iranian and Iraqi gas fields, a distant prospect due to political uncertainties in each of those countries.
At a recent Nabucco summit in Budapest, Hungarian Prime Minister Ferenc Gyurcsány described Nabucco as an issue of national security and suggested that the EU should finance the strategic project (EurActiv 28/01/09).
The next day, in a proposal to reallocate five billion euros' worth of unspent EU funds, the Commission earmarked 250 million for Nabucco. However, this amount in fact represents a risk-sharing facility, intended to help secure loans from banks under better conditions than those offered by the market (EurActiv 29/01/09).
The webpage of the Nabucco pipeline project states that construction will begin in 2011 and the first gas will flow in 2014.
Regarding financing aspects, the webpage merely says the following: "Considering the very large investments involved in the Nabucco project and the corresponding high level of risk, the decision to build the Nabucco project depends on the necessary certainty and security of the regulatory framework applicable to the long-term transmission contracts which will underpin the investments."
