European Central Bank (ECB) President Christine Lagarde on Friday ruled out offering short-term financing lines to utility companies facing a liquidity crisis, stressing that that is the task of European Union governments.

“In the current highly volatile context, it is important to introduce fiscal measures to ensure liquidity for solvent energy market participants, especially utilities,” Lagarde said at a press conference in Prague on Friday, according to Bloomberg and Agerpres.

“As for the ECB, as well as the national central banks within the Eurosystem, of course, we are ready to provide liquidity to banks, not to utility companies,” clarified Christine Lagarde.

The war in Ukraine caused an explosive increase in natural gas prices, which led to real chaos in the energy markets of Europe. EU energy ministers met on Friday in Prague to discuss a series of proposals, including capping the price of natural gas imported from Russia. Given that gas futures quotes are almost four times higher than they were a year ago, and rising energy prices are affecting companies, margin requirements have risen to unacceptable levels.

Uniper SE, Germany’s largest gas importer, has already received several billion euros in state aid and credit lines from state-owned bank KfW to continue operations. On Friday, VNG AG, a subsidiary of utility EnBW AG, also asked the Berlin government for help as its trading unit was hit by high gas prices.

Lagarde: ECB can help banks act as clearing houses for energy companies

The ECB has long argued that it is unable to provide emergency financing to energy traders. On Friday, Christine Lagarde said the ECB could help banks act as clearing houses for energy companies, but sounded the alarm over the idea of ​​”relaxing prudential rules for clearing houses”.

Christine Lagarde also said that national governments should introduce targeted measures to protect vital energy companies and maintain financial stability.

“Ideally at the EU level, member states should adopt a collective approach. I believe that this is the direction in which the Commission is working, and it is welcome,” said Lagarde.