‘Bailout as a last resort’ – Sweden and Finland step in to avert energy company collapse

Finland and Sweden have announced plans to offer billions of dollars in liquidity guarantees to energy companies after Russia’s Gazprom shut down the Nord Stream 1 gas pipeline, exacerbating Europe’s energy crisis.

domestic intends to offer 10 billion euros and Sweden plans to offer 250 billion kroner (23.2 billion euros) in liquidity guarantees.

“This has the ingredients for a kind of Lehman Brothers of the energy industry,” Finnish Economy Minister Mika Lintila said yesterday, referring to the US bank whose collapse helped spark the 2008 global financial crisis.

“The government’s program is a last-resort financing option for companies that would otherwise face bankruptcy,” said Finnish Prime Minister Sanna Marin.

The guarantees aim to prevent energy companies trading electricity on the Nasdaq Commodities Exchange from being brought down by rising safety requirements, an event that could in turn spread to the financial industry, governments said.

Lower gas flows from Russia, both before and after February’s invasion of Ukraine, have pushed up European prices and pushed up electricity costs.

The rapid rise in power prices has caused energy companies’ power futures contracts to become paperless, forcing them to find funds to post additional collateral on the exchanges.

The Swedish government feared that the Nord Stream shutdown would lead to another surge.

https://www.independent.ie/business/world/last-resort-rescue-sweden-and-finland-step-in-to-avert-energy-firms-collapse-41960730.html ‘Bailout as a last resort’ – Sweden and Finland step in to avert energy company collapse

Fry Electronics Team

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