Will the energy crisis in Sweden become a financial crisis?

Stockholm Apparently things had to be done very quickly: Last Saturday, Sweden’s Prime Minister Magdalena Andersson announced loan guarantees for energy companies. This should prevent the energy crisis from spreading to the financial sector, explained the head of government. Only two days later, with rare unanimity, all parties in the Swedish parliament voted in favor of the proposal for the social democratic minority government.

There was a reason for the haste with which the package of measures was adopted: After consultation with the Swedish financial regulator and the central bank, everyone involved believed that they had to provide the energy suppliers with financial support.

After the interruption of Russian gas deliveries to Europe and the associated extreme price increases for electricity, the government in Stockholm is providing electricity producers with a total of 250 billion crowns (23.4 billion euros) as a loan guarantee.

Many private households and companies have long-term supply contracts for electricity with the energy suppliers.