The owner cantons sit back and Axpo does not find its way in a “functioning market”: the federal government will not hesitate for long. Regulations are likely to follow the aid loan. You certainly won’t get rid of the power shortage that way.
With the current electricity prices, you could almost get dizzy – even if the stock exchange prices have not increased in the last few days.
One feels reminded of the Corona crisis. The Federal Council holds weekly media conferences and is already operating with emergency regulations again. At least this makes it clear to everyone that we are already in the middle of the energy crisis – and that this won’t reach us until the coming winter.
«Excellent access» to the capital market
The problem child this time is not Swiss (as in the Corona crisis) or UBS (as in the financial crisis), but the electricity industry and first and foremost the largest energy company in Switzerland, Axpo. He receives a credit line of 4 billion Swiss francs from the federal government. It sounds like a bad joke when Axpo praised its “excellent access to the capital market” in a press release just three weeks ago.
Now these sources seem to have dried up. The owner cantons make a particularly poor impression, because Axpo belongs to them and their power plants, so it is already “state owned”. The largest shareholders are the cantons of Zurich and Aargau, which are not entirely poor. They write in good faith that dividend payments will not be made until further notice – as if that were even a possibility.
In any case, one wonders: Was this loan really granted on a “subsidiary” basis, i.e. only after the company had exhausted all other options? Since Axpo is receiving the aid as a precaution and it does not seem to be a matter of “life and death” at the moment, one may doubt this.
In addition, the federal government even grants its credit as a subordinate, which means that these billions would be the first to catch fire if something went wrong. The rest of the creditors will be happy.
Every Swiss person takes a risk of 500 francs
One would therefore have expected a little more humility from Axpo boss Christoph Brand. At his media conference, he didn’t say thank you to the citizens of Switzerland. After all, everyone has a contingent liability of almost 500 francs – for a group that belongs to the cantons of north-eastern Switzerland.
Certainly, the electricity market is much more unpredictable than it used to be with its sharply increased prices. Even Brand had to admit: “The market works.” But electricity companies should actually be able to find their way around in a functioning market – liquidity management is one of the central functions of every company management. Have you really made no mistakes here?
The move to Bern – Axpo’s competitor Alpiq undertook it last December, but ultimately withdrew its application for aid – will not remain without serious effects, which will shift the balance of the economy further in the direction of the state. The federal government will acquire new powers in the electricity sector. It is quite possible that, like the banks, there will be capital and liquidity regulations overseen by a new bureaucracy.
And if not the Federal Council, then Parliament will be happy to take up the discussion about “excess profits” in the course of the rescue. Because the currently very high electricity prices will probably lead to high profits for Swiss companies in two to three years. Then it will be forgotten why – apart from Russia’s attack on Ukraine – there was a crisis at all. Due to the extremely subsidized expansion of German solar and wind energy, conventional power plants were not profitable for years and no more investments were made in them.
Companies only risk their money if they have prospects of profit. But after the rescue, politics will be much less predictable. Instead, the most important thing would be to regulate what happens to a power plant if its owner gets into trouble. The supply of electricity is systemically important, a single company is not. But the federal government and the energy suppliers have failed to be ready with such rules in good time. Now the country is in trouble.