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Sweden ready to open coffers for Ireland: Borg

Sweden could lend Ireland, which is negotiating a debt rescue deal, up to 10 billion kronor ($1.46 billion), Swedish Finance Minister Anders Borg said Monday.

Published: 22 November 2010 12:36 CET
Sweden ready to open coffers for Ireland: Borg

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.

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.

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EUROPEAN UNION

KEY POINTS: Is the EU really planning to double the price of Swedish snus?

Claims over the weekend that the EU planned to bring in a new tax which will nearly double the price of Swedish 'snus' tobacco led to the hashtag #Swexit trending over the weekend. But a commission spokesman stressed on Monday that the story was inaccurate.

Published: 28 November 2022 15:52 CET
KEY POINTS: Is the EU really planning to double the price of Swedish snus?

Where does the claim come from? 

The Aftonbladet newspaper on Sunday ran a story based around a “secret, leaked” proposal from the European Commission for a new excise tax on tobacco which the newspaper claimed would be presented at the start of next month, with discussion then taking place between various EU member states. 

The article does not name a source or quote from or show any parts of the document, but it quotes Patrik Hildingsson, the head of communications at the snus producer Swedish Match, who it says has “received the coming report”. 

What was the reaction? 

The story generated a near viral response on Swedish Twitter. The Sweden Democrats party jumped on the story, with the Twitter account for the party’s EU MEPs tweeting using the hashtag #Swexit, which then started to trend. 

According to Charlie Weimers, one of the Sweden Democrats’ MEPs, the commission is proposing a 12.5 percent increase in tax on cigarettes, a 200 percent increase in taxes on snus, and 500 percent increase in taxes on tobacco-free snus.

In a way, this is unsurprising as snus is used by about 17 percent of people in Sweden. The tobacco product is made by grinding up tobacco with flavourings and other ingredients and placing it in small bags which are pushed under the upper lip. It has been linked to a higher incidence of mouth cancer, but is much less dangerous than smoking. 

Why is snus sensitive for Sweden? 

When Sweden joined the European Union in 1995, it was granted an exemption from the ban on oral tobacco products the European Union had brought in back in 1992. Companies are allowed to manufacture snus in Sweden and sell it to their citizens, but they are not allowed to sell snus in other EU counties.  

Is it true that the European Commission plans to force higher tax on snus? 

Dan Ferrie, a European spokesperson on tax issues, told the EU’s daily press briefing on Monday that the commission’s coming proposals on tobacco taxation would not affect Sweden’s freedom to tax the product. 

“Sweden has had an exemption since it entered the EU when it comes to the sale of snus,” he said. “The proposal that we are working on right now is not going to change that situation because the sale of snus is not permitted outside Sweden. Sweden ill as a result continue to have full freedom to set its own tax rate and tariffs for snus.” 

Already on Sunday, Sweden’s EU commissioner Ylva Johansson said that she had stressed to the commission developing the new proposals the “unreasonable consequences for Swedish snus” if it were to force a higher tax rate. 

“My judgement is that this proposal has not yet been developed to the level where it can be proposed,” she said in an sms to Swedish state TV broadcaster SVT. “Tax questions require unanimity within the Ministerial Council.”

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