SWEDEN:SWEDEN'S GOVERNMENT yesterday proclaimed its willingness to pledge hard cash to the international rescue effort for Ireland's economy in a move that is variously an expression of friendship, an exercise in self-protection and a mercantile opportunity.
At a news conference in Stockholm, finance minister Anders Borg said Sweden would help Ireland in the same way it recently assisted other small and faltering north European neighbours.
“Anxiety in Ireland poses a threat to Europe’s financial stability, which could lead to a slower recovery and a deeper recession. Against this background, the government is prepared to consider a bilateral loan to Ireland in much the same way we helped Iceland and Latvia,” Mr Borg said.
As to why one of Europe’s most successful economies should dip into its pockets, Mr Borg said: “Sweden is a small country dependent on exports, so stability is crucial to us.”
Though a member of the EU, Sweden is outside the euro zone, but like Ireland, has an open and export-oriented economy. The exposure of Swedish banks to their Irish counterparts is limited – the equivalent of $4.3 billion, or roughly one-sixth of what both Britain and Belgium have at stake.
The magnitude of the Swedish package and the conditions under which it would be granted remain to be negotiated in detail.
However, Mr Borg said in an interview with the Swedish state broadcaster yesterday afternoon that he envisaged a loan facility of between five and 10 billion crowns (€503 million-€1.06 billion).
This loan, he added, would carry an interest rate of about 3 per cent, meaning that Sweden would ultimately earn money, rather than lose it, on the deal.
Mr Borg, who is widely viewed as one of Europe’s most able finance ministers and who shepherded Sweden relatively unscathed through the downturn, also egged on other non-euro countries to join the push to rescue Ireland’s economy. “I’m thinking of Denmark, Norway and perhaps Switzerland. It seems natural for such countries to consider whether they could contribute to a bilateral programme,” he said.
Sweden’s offer to participate in the bailout comes just a few months after its surprise decision to shut its Dublin embassy, apparently as part of a broader effort to increase its focus on developing countries in Africa and elsewhere.
Observers said yesterday that Sweden’s willingness to join the bailout was a strong signal of a renewed recognition of its European commitments.