Finland and Sweden are bailing out energy companies with billions, because they fear a strong reaction from the financial markets Monday morning as the Nord Stream 1 gas pipeline remains closed. The Swedish government promises the energy companies a credit guarantee of up to 250 billion Swedish krona (23.2 billion euros). Finland comes up with about 10 billion, writes Reuters news agency.
Sweden wants to prevent the Russian energy crisis from escalating into “technical bankruptcies” at energy companies and even to a financial crisis such as after the fall of the American investment bank Lehman Brothers in 2008. After all, some energy companies are no longer at risk of having enough collateral to generate electricity. trade, which could put them in trouble from Monday, Swedish Finance Minister Mikael Damberg said at a news conference.
“The issue is currently limited to energy producers, but if we don’t intervene, the problems threaten to spread to the rest of the financial market,” said the minister. “That could trigger another financial crisis.”
“This crisis has all the ingredients for a kind of Lehman Brothers for the energy industry,” Finnish Economy Minister Mika Lintila said, according to Reuters news agency. “The government’s support program is the last chance option for companies that otherwise risk going bankrupt,” said Finnish Prime Minister Sanna Marin.
Collateral rose sharply
Due to the sharply increased energy prices on the wholesale market in Europe, energy companies have to dig much deeper into their pockets to buy future electricity and gas. The company Fortum Oyj from neighboring Finland said last week that its collateral has increased by 1 billion euros in a week, to 5 billion euros.
Nord Stream 1
Gas prices have fallen in recent days, but are expected to skyrocket on Monday as the Nord Stream 1 gas pipeline failed to restart on Saturday as promised due to technical problems.
Sweden’s credit guarantees are provided by the National Debt Agency. They are primarily intended for Swedish companies, but other Scandinavian or Baltic companies can also rely on them during the first two weeks, it said on Sunday. Both the Swedish and Finnish parliaments are expected to vote on the issue on Monday.
Concern in Belgium too
There is also concern among some specialists in Belgium. On Twitter, Professor Damien Ernst from the University of Liège and Professor Bruno Colmant expressed their concern. They fear bankruptcy in the energy sector if the gas price were to skyrocket.
This content includes cookies from social media or other external platforms. Because you have disabled these cookies, this content will remain hidden. Please accept social media cookies to still display the content.
Free unlimited access to Showbytes? Which can!
Log in or create an account and don’t miss out on any of the stars.
Yes, I want free unlimited access