Sweden announces emergency guarantees for energy companies

PM says Sweden is going through the prospect of a ‘battle winter’ because of an vitality crunch amid the Russia-Ukraine battle.

Sweden has mentioned it might present a number of hundred billion {dollars} in liquidity ensures to Nordic and Baltic vitality corporations to avert a monetary disaster sparked by Russia’s Gazprom shutting the Nord Stream 1 fuel pipeline.

Prime Minister Magdalena Andersson warned that Sweden was going through the prospect of a “battle winter” due to Europe’s vitality crunch, and mentioned the precise particulars of the ensures remained to be labored out.

Chatting with reporters on Saturday, Andersson mentioned the ensures have been geared toward giving vitality teams “the respiratory room that’s wanted”.

She mentioned there was “a transparent safety coverage agenda behind Russia’s actions”.

Moscow has blamed sanctions imposed by the West following Russia’s invasion of Ukraine for impeding routine upkeep on the pipeline, however some European Union officers have accused Russia of utilizing vitality as a weapon.

“Russia’s vitality battle is having critical penalties for Europe and Swedish households and corporations, particularly in southern Sweden which depends on electrical energy costs in Germany, which in flip could be very depending on fuel,” she mentioned.

“This threatens our monetary stability. If we don’t act quickly it may result in critical disruptions within the Nordics and Baltics,” she mentioned.

“Within the worst-case situation, we may fall right into a monetary disaster.”

The announcement got here after Russia mentioned on Friday it was chopping off the Nord Stream fuel pipeline to Germany indefinitely because of what it mentioned have been leaks in a turbine – deepening Europe’s difficulties in securing winter gasoline.

The closure is anticipated to result in even increased manufacturing costs for electrical energy corporations when the market opens on Monday.

Talking on the identical information convention, Finance Minister Mikael Damberg mentioned the federal government will put ahead a proposal that enables it to challenge credit score ensures, including that all the nation’s parliamentary events and the speaker had been knowledgeable.

Damberg additionally mentioned the Swedish determination would “safe monetary stability not solely in Sweden, however in your entire Nordic area”.

The ensures have been anticipated to be in place on Monday earlier than the inventory market closing and would cowl all Nordic and Baltic actors throughout the subsequent two weeks.

Sweden’s parliament has been referred to as in from its summer time break to carry a vote on the federal government’s proposal on Monday.

Sweden is experiencing its highest inflation in 30 years, and the central financial institution has raised charges twice this yr, with extra steep hikes anticipated earlier than yearend.

Hovering electrical energy payments, rising rates of interest and stalling financial development have dominated campaigning forward of the final election on September 11.

On Wednesday, Damberg mentioned the federal government anticipated to have $8.36bn out there to assist ease shoppers’ ache of document electrical energy costs this yr and subsequent.