STOCKHOLM, Sept 3 (Reuters) – Sweden will offer several hundred billion Swedish crowns in liquidity guarantees to energy firms to help avert a financial crisis after Russia’s Gazprom shut the Nord Stream 1 gas pipeline, the prime minister said on Saturday.
The government will put forward a proposal that allows it to issue credit guarantees, Finance Minister Mikael Damberg said, adding that all of the country’s parliamentary parties and the speaker had been informed.
The announcement by Prime Minister Magdalena Andersson came after Russia scrapped a Saturday deadline to resume gas flows via Nord Stream 1, which runs under the Baltic Sea, deepening Europe’s difficulties in securing winter fuel.
“If we do not act, there is a serious risk of disruptions in the financial system, which in the worst case could lead to a financial crisis,” Andersson said.
“Putin wants to create division, but our message is clear: you will not succeed,” she added.
Sweden is experiencing its highest inflation in 30 years, and the central bank has raised rates twice this year, with more steep hikes expected before year-end.
Soaring electricity bills, rising interest rates and stalling economic growth have dominated campaigning ahead of the general election on Sept.
11.
On Wednesday, Damberg said the government expected to have 90 billion Swedish crowns ($8.36 billion) available to help ease consumers’ pain of record electricity prices this year and next. ($1 = 10.7633 Swedish crowns) (Reporting by Supantha Mukherjee and Johan Ahlander in Stockholm Editing by Jason Neely and Helen Popper)