On Friday, September 9, 2022, Christine Lagarde the President of the European Central Bank said that the ECB would not be providing short-term financing lines to struggling European energy firms amid the energy crisis.
At a news conference, Lagarde said “In this current, very volatile environment, it’s important that fiscal measures be put in place to provide liquidity to solvent energy-market participants, in particular utility firms,”.
However, “As far as the ECB is concerned, and the national central banks of the Eurosystem, of course we stand ready to provide liquidity to banks, not to energy utility firms,”.
Earlier this week Mika Lintila Finland’s Minister of Economic Affairs said that “This has had the ingredients for a kind of a Lehman Brothers of energy industry,”.
According to Reuters, Finland and Sweden recently announced “plans to offer billions of dollars 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’s Prime Minister Sanna Marin said “The government’s programme is a last-resort financing option for companies that would otherwise be threatened with insolvency,”.
The President of the ECB Lagarde said that it will be important for governments to deploy targeted measures to safeguard critical energy companies in order to preserve financial stability, according to Bloomberg.