Sweden has said it will provide several hundred billion dollars in liquidity guarantees to Scandinavian 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 faces 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, Anderson said the guarantees are meant to give energy groups “the breathing space they need.” He said there was “a clear political security agenda behind Russia’s actions.” Moscow has blamed Western sanctions imposed after Russia’s invasion of Ukraine for preventing routine maintenance of the pipeline, but some European Union 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 depends on electricity prices in Germany, which in turn depends heavily on natural gas,” he said. “This threatens our economic stability. If we don’t act soon, it could lead to serious unrest in the Nordic countries and the Baltics,” he said. “In the worst case scenario, we could fall into a financial crisis.” The announcement came after Russia said on Friday it was indefinitely shutting down the Nord Stream natural gas pipeline to Germany due to what it said were leaks in a turbine – deepening Europe’s difficulties securing fuel for the winter. The shutdown is expected to lead to even higher output prices for power companies when the market opens on Monday. Speaking at the same press conference, Finance Minister Michael Damberg said the government would submit a proposal allowing it to issue credit guarantees, adding that all the country’s parliamentary parties and the president had been informed. Damberg also said that the Swedish decision would “ensure financial stability not only in Sweden, but in the entire Nordic region.” The guarantees were expected to take effect on Monday before the stock market closed and would cover all Nordic and Baltic players within the next two weeks. Sweden’s parliament was called back from its summer recess 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 sharp increases expected before the end of the year. Rising electricity bills, rising interest rates and slowing economic growth have dominated the campaign ahead of the September 11 general election. On Wednesday, Damberg said the government expects to have $8.36 billion available to help ease consumer pain from record electricity prices this year and next.
