Prime Minister Sanna Marin (SDP) said the Stability Law will be presented to Parliament on Monday.
On Sunday, the Finnish government announced emergency financing of up to 10 billion euros to stabilize the electricity market. Funding should take the form of loans and guarantees, not grants.
prime minister Sanna Marin (SDP) made the announcement, flanked by Finance Ministers Annika Saarikko (Cen) and Economy Minister Mika Lintilä (Zen).
The Cabinet met at the House of Estates on Sunday afternoon to negotiate the funding package and began a press conference just after 5pm.
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Marin said the bill will go before Parliament on Monday.
The proposed loan and guarantee scheme would be valid until the end of 2023, with maximum loan terms of 2 years. The government announced that the loans would be granted at arm’s length conditions.
The program is intended as a last resort for companies that otherwise face bankruptcy.
The emergency funding was discussed during last week’s budget negotiations and again by leaders of the five governing 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 package of measures to address the cash management risks of power generation companies will be presented to Parliament quickly,” Saarikko wrote.
No “free money”
At Sunday’s press conference, Saarikko said the state was not offering “free money” but loans and loan guarantees with “extremely stringent conditions” that would only be used as a last resort to secure liquidity.
The aim of the measures is to ensure security of supply and to strengthen Finland’s energy self-sufficiency, emphasized the finance minister.
“We want to avoid a major crisis,” she said, noting that some utilities could potentially be at risk of collapse due to a liquidity squeeze. However, she said it was impossible to predict when a worst-case situation might be reached.
Saarikko urged the EU to take joint action on this 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 the structural issues related to electricity market futures.
“We expect the Commission to respond to this issue. Finland cannot cope with this alone,” said the Prime Minister.
Lintilä answered a question that the financing was only available to Finnish companies and not to the majority-owned German Fortum subsidiary Uniper.
Saarikko said each company’s situation and needs would be assessed on a case-by-case basis. She said Cabinet had not set a maximum amount that would be available to an individual company.
Saarikko pointed out that many of Finland’s energy utilities are partially or fully owned by local municipalities, so the knock-on effects of financial difficulties could be significant.
The finance minister added that the government had been discussing the idea of a “windfall tax” on rapidly increasing profits for energy companies that benefit from phenomena for which they are not responsible. However, ministers decided it was unclear whether this would have the desired outcome in the current unstable situation, she said.
On Sunday, the federal government said it would use windfall tax revenues to lower consumer prices for energy.