Sweden announces emergency guarantees for energy companies | Russia-Ukraine war news
The prime minister says Sweden faces the prospect of a “winter of war” due to an energy crisis amid the war between Russia and Ukraine.
Sweden has said it would provide several hundred billion dollars in liquidity guarantees to Nordic and Baltic energy companies to avert a financial crisis triggered by Russia’s Gazprom shutting down the Nord Stream 1 gas pipeline.
Prime Minister Magdalena Andersson warned that Sweden faced the prospect of a “winter of war” due to Europe’s energy crisis and said the exact details of the guarantees remained to be worked out.
Speaking to reporters on Saturday, Andersson said the guarantees were meant to give energy groups “the breathing room they need”.
She said there was “a clear security policy agenda behind Russia’s actions”.
Moscow has blamed sanctions imposed by the West after Russia’s invasion of Ukraine for preventing routine maintenance on the pipeline, but some EU officials have accused Russia of using energy as a weapon.
– Russia’s energy war has 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 says.
“This threatens our financial stability. If we don’t act soon, it could lead to serious disruptions in the Nordics and the Baltics,” she says.
“In the worst case, we could end up in a financial crisis.”
The announcement came after Russia said on Friday it was shutting down the Nord Stream gas pipeline to Germany indefinitely due to what it said were leaks in a turbine – deepening Europe’s difficulties in securing winter fuel.
The closure is expected to lead to even higher production prices for the electricity companies when the market opens on Monday.
At the same press conference, Finance Minister Mikael Damberg said the government will present a proposal that would allow it to issue credit guarantees, adding that all the country’s parliamentary parties and the Speaker had been informed.
Damberg also said that 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 closed and would cover all Nordic and Baltic players within the next two weeks.
Sweden’s Riksdag has been called back from the summer break to hold a vote on the government’s proposal on Monday.
Sweden is experiencing its highest inflation in 30 years and the central bank has raised interest rates twice this year, with more steep increases expected before the turn of the year.
Skyrocketing electricity bills, rising interest rates and stalling economic growth have dominated the campaign ahead of the September 11 general election.
On Wednesday, Damberg said the government expected to have $8.36 billion available to ease consumer pain from record electricity prices this year and next.