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Sweden ready to open coffers for Ireland: Borg

AFP/The Local · 22 Nov 2010, 12:36

Published: 22 Nov 2010 12:36 GMT+01:00

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A Swedish loan to Ireland would be given in addition to funds the country gets from the International Monetary Fund (IMF) and the European Union.

"We are offering a loan similar to those given to Iceland and Latvia," Borg told Swedish public radio," adding that loans to those countries during the global financial crisis amounted to between five and 10 billion kronor.

Borg said "no final decision has been taken on the amount of the loan but the contribution could be at the same level as the loans to Iceland and Latvia."

He added the loan to Ireland would carry an interest rate of about three percent.

"Sweden is a small country dependent on exports, so stability is crucial to us," Borg said.

Sweden, a member of the EU but not of the single currency eurozone, said late Sunday it would consider a loan to Ireland but did not specify the amount.

The Scandinavian country's public finances are among the healthiest in the European Union and the government is forecasting growth of almost five percent this year.

A Swedish loan to Ireland would need to be approved by parliament, Borg said.

Britain said Monday it was considering a loan to Ireland of about £7 billion ($11.2 billion) as part of an international rescue.

Story continues below…

It will also lend to Ireland via the EU/IMF bailout.

The EU and IMF accepted on Sunday Ireland's request for a bailout estimated at up to €90 billion ($123 billion) to stabilise the country's debt-stricken banking system and restore its strained public finances.

AFP/The Local (news@thelocal.se)

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Your comments about this article

13:31 November 22, 2010 by Frobobbles
So incredibly stupid and pointless. If you help them every time, they will never learn. Let them eat babies.
14:00 November 22, 2010 by miss79
my god this man is crazy, here in sweden unemployment are rising up and things are getting expensive n do WE need to help ireland?help ourselves first! wat a stup man
14:04 November 22, 2010 by riose
@Frobobbles Do not forget that you are rescuing the banks.

And that is made to guarantee the money international investors put in them.

So if they do not pay, the German/French/British/... and probably even Swedish money invested in there is gone.

Their government decided to pay (Iceland in similar circumstances decided not to pay, and England & Netherlands stated that they will not allow Iceland to enter in the UE if they do not pay back their money) sacrificing the people, and making them pay a debt ca. 50.000euros per family.

And the worst part is yet to come. We are making them pay interest so they can pay back your money. This is a robbery.

Imagine that you find a friend in a restaurant. His Visa is not working so you offer to pay his dinner. The bill is 10.000:-, and you already said that you will pay it, you the debt is yours. At this point your "friend" offers to borrow you the 10.000:- with a 10% interest. Is a scam.

And BTW, if you are thinking "Sweden do not use euro, is not our deal", I would like to remind you a couple of things. First, that Sweden got a loan from the CEB in 2008 to face the Latvian bank exposure.

Second, Sweden export to the EU. If the EU goes bad, Sweden goes bad.
14:39 November 22, 2010 by Shanie
This will not happen -

Firstly because its 1 billion euro, in the overall picture it is small money.

Secondly - Raising that kind of money isn't the problem, confidence in the market is the problem. Ireland will not ask for another billion from Sweden as this would show that more money is needed, therefore reducing international confidence in the country, and as that is the over all problem (besides the banks being too big) why risk it over 1 billion. Also I would imagine that this offer is some posturing from the Swedish government which will add to the already high level of confidence that the market has in Sweden ability to handle its debt.

Thirdly - (Frobobbles) The loan from the IMF etc is neither stupid or pointless - it will stabilise the banking system and the public finances (good for Ireland) but it will also reduce the risk of contagion, thus allowing Portugal in particular some breathing room to manages it debt (at a lower interest rate) and allow some confidence to come back into the Euro market. Also it is a sound investment for those making the loans - 5% on 100 billion over 3 years. It is in Sweden best interest for the eurozone to be strong, as a weak euro against a strong krone would have an impact on exports, and for a country who's economy is based largely on exports this would be very negative.

Fourthly - Unlike the UK, Sweden is not exposed to such high levels of risk from the Irish banking sector - The UK has over 120 billion in exposure to the Irish banks and also Ireland is the biggest consumer of British good in the world (over 23 billion per year) It is in the UK best interest to offer the 7 billion loan.

Its a kind offer but one which I think will neither be accepted or is expected to be accepted.
14:46 November 22, 2010 by villjobba
What if Ireland just turns around tomorrow and refuse to pay back, same way Iceland did? How do you get the money back? What will Sweden and the EU do? Expel Ireland from the EU and with what effect?
15:01 November 22, 2010 by Jarvilainennen
First the banks are allowed to lend too much money to developers, this with a government back-up, so the whole damn country is broke as a result. Now private people with their debts are going bankrupt because of unemployment, moreover having to pay even more debt -because of sloppy bank management.

When will you apes learn your lesson? Everyone knew this years before and nothing was done. All the politicians are capable of is talking same sh*it all over the European Union. In here: "This does not concern us, we´re OK...."

We have election time coming soon. Do not pretend to be surprised of outcome.
15:05 November 22, 2010 by damsugare
The biggest issue in Ireland at present is the Public Sector, as this accounts for about 75 % of the cost each year to the government, the money for this is (was) generated substantially by the private sector within Ireland. Now with the failing private sector (taking pay cuts of 40 - 90% the money is not being generated). The public sector is probably the most inefficient in the world and are subject to a wage agreement (which states that they will be paid the same as the ridiculously exagerated private sector at the heoght of the boom) that now Europe must pay for. In my opinion the loans should have a very strong condition which is that the public sector must be completely reformed otherwise there is no future planning and the money will go to those who work the least, and the older generations while the younger families go hungry and strugle under the weight of negative equity homes etc.
15:20 November 22, 2010 by Swedesmith
How will the money be spent...who will benifit?
15:40 November 22, 2010 by facetedjewel
I would be interested in reading the rest of the terms of this loan from the IMF. The IMF serves the demands of the global corporatocracy, whose chief interest seems to be acquiring other countrys' natural resources. The IMF usually tries to stretch out the repayment of the loan as long as possible, saddle a country with as much debt as possible, and impose stiff penalties for failure to make payments. This is where countries start to sell off their natural resources to private corporations trying to come up with the money to service the debt.

This came as a rude surprise? to the governments of countries that accepted these loans twenty years ago, but now? The consequences to Poland alone should serve as a warning to the Baltic region of accepting loans from the IMF/World Bank. Good for Iceland for defaulting! I hope Ireland is wise enough to do the same. Sweden's banks may be little sharks in the tank, but they are sharks nevertheless.
15:43 November 22, 2010 by Twiceshy
This is not helping Ireland, it's just saddling them with more debt and increasing taxes to kick the can a bit further. It's a poisoned gift.

How many British, German, Swedish (etc) banks would collapse without this "Irish bailout"? Those are the ones actually getting bailed out by this.
15:45 November 22, 2010 by RobinHood
A generation of Greeks and Irish continuously elected governments that have dragged their nations into bankruptcy. The Portuguese, Spanish and Italians aren't far behind. Each Greek and Irishman who voted for a governing party has a stake in this mess; this has been brewing for years. Their nations are now economically as well as morally bankrupt. They borrowed far more than they could repay, while turning a blind eye to what their banks were up to. They did this safe in the knowledge the EU would rescue them with money garnered from responsibly governed nations. What a bunch of shysters. Of course money has to be found to prop up their rotten economies; just as they knew it would be. We have no choice but to pay for their fine party. The price? Wholesale economic restructuring. Artificially low Irish corporation tax. Gone! Greek state employees drawing public pensions at 50. Gone! Greek and Irish financial independence. Gone! Generous public salary packages. Gone!

If the Greeks and Irish don't like it, fair enough, we'll keep our billions of hard earned money, and build schools and hospitals with it at home instead.
15:50 November 22, 2010 by Twiceshy
For each bad loan, there are two guilty parties - the one who took the loan and the one who gave it (i.e. all the foreign banks that are now getting rescued by this bailout).

Which one is more stupid, I don't know.

By the way, if the intention was to calm the financial markets and help Portugal and other countries borrow cheaper, it has already failed:


16:04 November 22, 2010 by Beavis
Dont bother.. they will just waste the money on something called "the Senate" and useless politians salaries. In Ireland the 2 main parties are the same (just different idiots) and spelt diferently, the rest a a bunch of crazies no one could ever vote for! Sweden dont waste your money!
16:39 November 22, 2010 by Syftfel
P I G S. (Portugal, Ireland, Greece, Spain). Who's the next, overbloated public sector, country with a hand out? Time to re-think Sweden's EU-membership, and especially her membership in the Schengen agreement. Yes to a Nordic union. NO to Europe!
17:15 November 22, 2010 by Beavis
Syftfel you muppet, Ireland isinst even in Schengen! Does that union exlude Iceland??
17:17 November 22, 2010 by Nemesis
For those of you with no clue.

The banks in Ireland owe and in turn are owed, literally billions of Euro to Swedish banks, who gave easy money during the boom in Ireland.

In Dublin at present the ever decreasing spiral of stupidity and greed continues with there friends in Stockholm, London and New York feeding the orgy of crazyness.

One of the major Swedish banks was up to its neck in what happened in AIB in Dublin, as was several Icelandic, London and New York banks. Sweden is taking part in the bail out to look good and to avoid very awkward questions in Stockholm as to why they lent literally billions of Euro's in unsecured loans to people with no assets to reflect the investments.

This is nothing to do with the EU, Sweden or Ireland. It is purely to do with covernig the backs of a bunch of greedy little backhand takers, in Dublin, London, New York and Stockholm.

There is no way my personal opinion of what should be done to the bankers in Dublin, Stockholm, London and New York would be allowed to be posted on any forum.
17:33 November 22, 2010 by Twiceshy
Exactly Nemesis.

The real question we should be asking is, how much of these loans from Sweden will end up coming right back to the Swedish banks?

Of course, the Irish taxpayers will be paying interest on the loans, i.e. they're being further ENSLAVED for the benefit of foreign banks. It starts with the small countries, but it won't stop there. Eventually we'll all be paying higher taxes to rescue the Rothschilds of the world.

The only solution is to default on the debt, that is not pay it at all. Yes it will cause pain, but unless you're willing to enslave other countries (and in the future, yourselves), it's the only way to deal with the excess of debt that can't be repaid.
17:53 November 22, 2010 by riose
@villjobba The cannot. If you refuse to pay, you destroy the international confidence in your country, which means that nobody will borrow you money (buy bonds)

@RobinHood Do not mix the Greek and Irish cases. The Greek crisis is caused by spending more that what they could get.

The Irish crisis is basically the same we saw in the US, UK, Germany, etc, with one difference: Their GDP was so small that they could not save their banks.

Ireland is Iceland II.

@Syftfel Use the whole acronym: PIIGGS (you forgot GB). Source: Wikipedia

If Spain, Italy or GB shakes, the world economy collapses. They cannot be rescued. It will trigger a chain reaction.

You could have gone for the Nordic Union by refusing the loan when the Riskbank asked for money to the European Central Bank (yes, that one that makes euros).

But it was not convenient, wasn't it?
17:57 November 22, 2010 by Twiceshy
> If you refuse to pay, you destroy the international confidence in your country, which means that nobody will borrow you money

False. Russia and Argentina defaulted on their debt not so long ago, and they're perfectly able to borrow money today. In fact, after a country puts its fiscal house in order, people will be lining up at your door to lend you money.
18:44 November 22, 2010 by bac25
Sweden has, so far, emerged from the financial problems of recent years in relatively better shape than most other European countries. Sweden will participate in arrangements to assist Ireland - or whichever country- first and foremost out of self interest, to avoid contagion spread in the system. The global financial system failed, dragged down by it's own arrogance (banks) and incompetent regulation/supervision (governments). The problems especially in e.g. Ireland, Greece and maybe soon others were exaggerated by the "ongoing euro experiment" which imposed central control of interest rates delivering cheap money to irresponsible users. @twiceshy is correct, there are two parties to the loans! . The results are becoming clearer, even if the story is not yet over.

But don't only pin the blame to the banks - they couldn't have gone so far without the implicit collusion of government. In Ireland this was blatant, and much of what we now see is homemade - a result of the unhealthy closeness of government, banks and property developers who between them screwed up what was a essentially an economic success.

In Ireland's case, this was pretty obvious already some years ago, but all commentators who warned of disaster were branded generally as "doom-mongers".

Now the next Irish generation or two will pay for these mistakes, mostly to ensure the integrity of the banking system and the "euro project".

A positive outcome for Sweden may be a dampening of enthusiasm to give up the SEK!
20:34 November 22, 2010 by Nemesis
@ bac25

Something you are leaving out.

Sweden had a crash worse than Ireland in the 90's. Ireland, UK, Germany, Norway, Denmark, etc all loaned money to keep Sweden afloat.

Now it is Sweden's turn to return the favour.

Swedes are still paying for that crash. It will be the same two decades later in Ireland. The poor are kept poorer and don't even notice it as the rich get richer at the expense of the poor.
21:17 November 22, 2010 by Yuretz
Help Ireland - ASAP. Poor bankers will not receive bonuses! Do not let the bankers to die!
21:35 November 22, 2010 by damsugare
when sending the cheque over can someone pop in some falu korv into the envelope please and also the current clas ohlson catalogue ;-) maybe a little snus also tack sa mycket
22:06 November 22, 2010 by bac25

maybe more snus is better, to dull the pain!


i don't quite get the point-are you saying that your crash was bigger than theirs? How are the Swedes still paying? The "small" matter of having control over your own fiscal and monetary policy = interest rates and currency, might have made a difference to the outcome?
22:19 November 22, 2010 by Twiceshy
Wait, this is actually worse than I thought. The Irish people are really getting robbed, just look at this:


The gist is that these are not unsecured loans (as government bonds almost always are), they will actually post Ireland's assets as colateral!

In other words, other countries will take over Ireland's oil reserves, etc. if Ireland is unable to pay back the loans (which is quite possible since the world economy is probably going to be crappy for the foreseeable future).
22:56 November 22, 2010 by facetedjewel
I have the same questions as Sweedee.

Who will actually receive the money and how will they use it? The Great White sharks in the US cried piteously for a bailout, then used the money to buyout and dismantle the big banks that were bleeding, consumed many smaller banks, thus whittling down the competition. The Tribune article cited by 'Twiceshy' seems right in line with how disaster capitalism works. I'm waiting for 'Nomark' to show up demanding to be shown evidence of a conspiracy. ;^)
12:51 November 23, 2010 by alingsaskev
This is actually a really smart move by the Swedish Central Bank. Sweden still has a AA rating, isn't in the Euro and can therefore borrow money at the moment at minuscule rates of interest. In turn it can look like a saviour for Ireland whilst charging quite high interest on this loan, make a ton of money on the deal and in turn get some of the cash back lost by Swedish banks that backed the Irish boom in the past.

It's a win win! Genius!
13:59 November 23, 2010 by jojoholmes
Absolutely agree with riose- the crisis in Ireland is very different from that of Greece, Spain and Portugal.

Some of the posts here suggest that the Irish crisis is caused by a large ineffecient public sector. The Irish public sector is perhaps the smallest in europe. The reality is a personal debt crisis caused by a number a factors.

The irish people don't want this bailout. I think most would be in favour of a default on bank bondholders instead. Remember, the stupidy of the irish borrowing the money is only surpassed the stupidy of those lending it.

Swedish taxpayers should take note that many of the things that happened in Ireland are now happening (for 2nd time) in Sweden e.g. lowering taxes in a housing boom. Swedish personal debt is still increasing by 3 billion krones every week, and this is after the new restrictions on mortgages were applied. I would be very careful about making stupid derogatory comments of your european neighbours. It's not that long ago that the IMF was knocking on Sweden's door and it may not be long before they're there again.
15:09 November 24, 2010 by facetedjewel
Anyone else see the front page of the Irish Daily Star (Nov 23)?
02:16 November 25, 2010 by kerry1
We dont want any bailout, we are in enough trouble already.

They have destroyed our future and that of our children.

Questions also have to be asked about the EU regulations?

Why did they allow this reckless gambling of money to our

Banks in Ireland, why was it not stopped. Why are the bond holders not made to take some loss, afterall when you take a gamble you must be prepared to take the risk. We do not want any bailout from anybody. We want justice and action and let the rich take some of the heat. Instead, they have tied a rope around our necks for generations to come, all for the Bond Holders and Banks.
10:38 November 29, 2010 by damsugare

i am beginning to wonder if it will be all that bad in Ireland, I personally did not recognise my fellow Irish any more who used to help each other at the side of the road not run each other over to get to a meeting to make money, there is no way i could have nought a house with enough space in a decent area with the way things were going, for a decent life in Ireland you needed to have so much cash, maybe all of the horrible stuff has to happen for us to regain our soul and remember what it is to be Irish, and build a better less fianna fail greedy society, we could definately learn something from swedish society and the values they work so hard for there, not perfect but with the heart in the right place
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