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EU to probe Sweden's 'economic imbalance'

TT/The Local/og · 14 Feb 2012, 14:25

Published: 14 Feb 2012 14:25 GMT+01:00

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Sweden has been singled out for investigation along with countries including France, Britain, Finland and Denmark. The Commission says the countries in the report have displayed economic danger signs such as asset bubbles, high labour costs and long-term trade deficits. The weaknesses have been highlighted by a new EU 'economic scoreboard', created to identify countries at most risk.

The 12 countries being discussed have range from crisis economies such as Spain, Italy and Belgium to economies considered to have avoided the worst of the euro crisis, such as Sweden.

”Many have become accustomed to the fact that we have bad finances in Europe, so this does not come out of the blue. But now the finger is being put on certain countries that are so weak that they could be forced into some kind of a debt reconstruction,” said Robert Bergqvist, chief of economics of SEB.

Credit rating agency Moody’s lowered the rating for six EU countries on Tuesday and warned three others that the outlook was negative. Those whose rating was lowered were Italy, Malta, Portugal, Slovakia, Slovenia and Spain, and the warned countries were France, Britain and Austria.

Representatives at Moody’s predicted that the market’s confidence in the Eurozone ”probably remains fragile” accoring to TT news agency.

SBAB’s chief of economy Tomas Pousette said that the downgrading of the credit ratings is negative, but that it wasn’t entirely unexpected.

“It practically means that it will become more expensive for these countries to borrow money. If you only look at the lowered ratings, it can actually be positive for Swedish interest rates.

“We are one of the few countries who are not affected by all this, and for those who want to invest in government bonds of high credit quality… it’s sort of fewer countries left to choose from and Sweden is one of them,” he said to TT news agency.

Story continues below…

When asked if this was a consequence of the Riksbank's actions with regard to interest rates, Pousette replied:

“I don’t think this is the most important part of the decision. It’s more about the Swedish workforce, the Swedish krona, economic outlook and inflation,” he told TT.

TT/The Local/og (news@thelocal.se)

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Your comments about this article

15:00 February 14, 2012 by Frobobbles
Imbalance? What swedish imbalance? This is outrage! F* you dolphin and whale!
15:05 February 14, 2012 by engagebrain
what Swedish imbalance ?

In true Local style the major part of story is missing
15:19 February 14, 2012 by skogsbo
an so the imbalance is where, it's like having a title saying one thing, then taking about the credit rating of others, come Local, at least pretend you are wannabe journalists!

As for the EU, once about 10 other Euro EU countries have their affairs in order in 10-15 years time, then perhaps they can pick fault with others. It's just flak deflect while chaos reigns in Greece, Italy etc..
15:52 February 14, 2012 by 2394040
Whenever the final chapter of the history of the world is written, the EU will be seen as a huge mistake. In any combination of nations, the stronger will always bully the weaker; one of the facts of life. And I think most Europeans know which European nation is the primary bully.
15:54 February 14, 2012 by dockmandock
Sorry but that article hasn't informed me at all.
16:54 February 14, 2012 by skogsbo
the EU / Euro has never had it's account official approved as no accountancy firm or auditor is willing to sign it off, putting it's name to it as they are that badly kept. Fraud and errors are rife. If it was a private company it wouldn't be allowed to happen.

So why should any individual country even listen to it. The EU and Euro is a money spinning joke. Only the EMPs benefit, with their huge salary and full pensions after only a few years service.
20:37 February 14, 2012 by BillyB
You people crack me up...how do you manage to get dressed in the mornings...???

Took me 10 seconds to search and find articles which list the full details..you could have done that in the time it took to moan!!!
04:15 February 15, 2012 by samwise
there are layers and layers of governments doing all these planning, regulating, managing... they'll run out of people to fill the bureaucratic positions soon.
08:42 February 15, 2012 by karex
This does not appear to be a sign that there's anything wrong with the countries on the list, but rather an attempt to avoid another crisis by adopting an "eyes wide open" approach.

09:01 February 15, 2012 by Marc the Texan
Talk about fiddling while Rome burns. Southern Europe is melting off the face of the map.
15:05 February 15, 2012 by autonomy
Specifically, Sweden and Denmark are included due to "housing bubbles and increased private debt". (EUObserver.com)
15:34 February 15, 2012 by karex

Precisely. From what I understand the first time around they were only monitoring economic health based on one parameter, and missed a lot. After the first crisis, they decided to monitor more parameters and that just brought more nations into the net of scrutiny. Housing bubbles and increased private debt could be indicators that something could potentially be wrong. It doesn't mean there is. It's better to be pro-active then to pick up the pieces after the fact.
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