Sweden to issue guarantees worth ‘billions’ to energy groups

Sweden to issue guarantees worth ‘billions’ to energy groups

Leader of the Social Democrats and Swedish Prime Minister Magdalena Andersson speaks during a press conference on September 1, 2022 in Stockholm. — AFP pic

Sunday, 04 Sep 2022 7:06 AM MYT

STOCKHOLM, Sept 4 — Sweden said Saturday it would provide liquidity guarantees to Nordic and Baltic energy companies worth “billions of dollars” in a bid to prevent a financial crisis sparked by Europe’s energy crunch.

Prime Minister Magdalena Andersson warned Sweden was facing the prospect of a “war winter”, and said the exact details of the guarantees remained to be worked out.

The announcement came after Russia said Friday it was cutting off the Nord Stream gas pipeline to Germany indefinitely due to what it said were leaks in a turbine.

The closure is expected to lead to even higher production prices for electricity companies when the market opens on Monday.

Speaking to reporters, Andersson said the guarantees were aimed at giving energy groups “the breathing room that is needed”.

She said there was “a clear security policy agenda behind Russia’s actions”.

“Russia’s energy war is having serious consequences for Europe and Swedish households and companies, especially in southern Sweden which is dependent on electricity prices in Germany, which in turn is very dependent on gas,” she said.

“This threatens our financial stability. If we don’t act soon it could lead to serious disruptions in the Nordics and Baltics,” she said.

“In the worst-case scenario we could fall into a financial crisis.”

Finance Minister Mikael Damberg, speaking at the same press conference, said the Swedish decision would “secure financial stability not only in Sweden but in the entire Nordic region”.

The guarantees were expected to be in place on Monday before the stock market closing and would cover all Nordic and Baltic actors within the next two weeks.

Sweden’s parliament has been called in from its summer break to hold a vote on the government’s proposal Monday. — AFP