Cabinet offers up to 10 billion euros in emergency loans to help stabilize the electricity market | New

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Prime Minister Sanna Marin (SDP) said the Stability Bill would be presented to Parliament on Monday.

Image: Henrietta Hassinen / Yle, graffiti: Samuli Huttunen / Yle

On Sunday, the Finnish government announced emergency funding of up to 10 billion euros aimed at stabilizing the electricity market. Funding should be provided in the form of loans and loan guarantees, not grants.

Prime Minister Sanna Marin (SDP) made the announcement, flanked by the Minister of Finance Annika Saarikko (Cen) and Minister of Economic Affairs Mika Lintila (Cen).

The firm met at the House of Estates on Sunday afternoon to negotiate the funding and began a press conference shortly after 5 p.m.

The article continues after the photo

PM Sanna Marin (SDP) addressed reporters on Sunday. Image: Petteri Sopanen / Yle

Marin said the bill would be presented to parliament on Monday.

The proposed loan and guarantee program would be valid until the end of 2023, with loan periods of up to 2 years. Loans should be granted on market terms, the government said.

The program is intended as a financing option of last resort for companies that would otherwise be threatened with insolvency.

The emergency funding was discussed during budget talks last week and again by leaders of the five ruling parties on Saturday, when the Swedish government announced similar emergency funding.

Saarikko commented on Twitter on Saturday evening that preparations for the financial package were already well advanced.

“A set of measures for the cash management risks of power generation companies will be presented to parliament shortly,” Saarikko wrote.

No “free money”

At Sunday’s press conference, Saarikko said the state would not offer “free money” but rather loans and loan guarantees with “extremely strict conditions” that would only be used last. recourse to ensure liquidity.

The Minister of Finance stressed that the objective of these measures was to ensure security of supply and to strengthen energy self-sufficiency in Finland.

“Our goal is to avoid a major crisis,” she said, noting that some public services could eventually risk collapsing due to a lack of cash. However, she said it was impossible to predict when the worst case might be reached.

Saarikko urged the EU to take collective action on the matter as soon as possible. She said she and Lintilä would raise the issue at EU ministerial meetings this week.

Marin said the government has already asked the European Commission to intervene in structural issues related to the future of the electricity market.

“We expect the Commission to respond to this problem. Finland cannot handle this alone,” the Prime Minister said.

In response to a question, Lintilä said the funding would only be available to Finnish companies, not, for example, Fortum’s German, majority state-owned subsidiary Uniper.

Saarikko said each company’s situation and needs would be reviewed on a case-by-case basis. She said the firm had not set a maximum amount that would be available to a single company.

Saarikko pointed out that many of Finland’s energy utilities are partly or wholly owned by local municipalities, so the repercussions of financial difficulties could be significant.

The finance minister added that the government had floated the idea of ​​a “windfall tax” on rapidly rising profits for energy companies benefiting from phenomena for which they were not responsible. However, ministers decided it was unclear whether this would have the desired outcome in the current and volatile situation, she said.

On Sunday, the German government said it would use windfall tax revenues to drive down consumer energy prices.

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