EU’s Von der Leyen Pledges Liquidity Help for Power Producers

European Union emergency interventions in the energy market will include support for electricity producers struggling to find enough cash to guarantee trades after wild swings in natural gas prices.

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(Bloomberg) — European Union emergency interventions in the energy market will include support for electricity producers struggling to find enough cash to guarantee trades after wild swings in natural gas prices. 

Energy ministers are due to meet on Friday to discuss action needed to stabilize Europe’s markets after Russia shut off gas supplies indefinitely on the Nord Stream pipeline. European Commission President Ursula von der Leyen outlined some the likely proposals on Twitter that include liquidity help for companies.

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Many companies are finding it increasingly difficult to manage margin calls, an exchange requirement for extra collateral to guarantee a trading position when prices rise. Sweden and Finland created emergency backstops at the weekend to help utilities struggling with collateral requirements in a bid to prevent a “Lehman” moment. 

On a list of measures drawn up by the Czech Republic, which holds the European Union’s rotating presidency, was a Europe-wide credit line for market participants faced with very high margin calls.

Uniper SE, Germany’s biggest utility, requested another 4 billion euros ($3.97 billion) in bailout loans, taking total government support to over 20 billion euros. Austrian utility Wien Energie received a 2 billion-euro credit line from the government last week.