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Sweden, Finland step in to avert Lehman-like situation for power companies
(EurActiv, 5 Sep 2022) Finland and Sweden on Sunday (4 September) announced plans to offer billions of euros in liquidity guarantees to power companies in their countries after Russia’s Gazprom shut the Nord Stream 1 gas pipeline, deepening Europe’s energy crisis.
Finland is aiming to offer €10 billion and Sweden plans to offer 250 billion Swedish crowns (€23.4 billion) in liquidity guarantees.
“This has had the ingredients for a kind of a Lehman Brothers of energy industry,” Finnish Economic Affairs Minister Mika Lintila said on Sunday.
When Lehman Brothers, the fourth-largest US investment bank at the time, filed for bankruptcy in September 2008 with more than $600 billion in debt, it triggered the worst parts of the US financial crisis.
“The government’s programme is a last-resort financing option for companies that would otherwise be threatened with insolvency,” Finland’s Prime Minister Sanna Marin told a news conference.
EU ministers to discuss options
EU energy ministers on Friday (9 September) will discuss options to rein in soaring energy prices, including gas price caps and emergency credit lines for energy market participants.
Ministers will also consider offering urgent “pan-European credit line support” for energy market participants facing very high margin calls, said a document drafted by the Czech Republic, which holds the EU’s rotating presidency.
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EurActiv, 5 Sep 2022: Sweden, Finland step in to avert Lehman-like situation for power companies
