Analysis – Brexit

Why Britain’s European best friend is fretting about Brexit

Why Britain's European best friend is fretting about Brexit
Sweden's Prime Minister Stefan Löfven and British counterpart David Cameron, presumably agreeing about something. Photo: Geert Vanden Wijngaert/AP/TT
People who want Britain to leave the European Union often claim it could rekindle relationships with its best friends like the US or Australia. But are they missing a better friend closer to home: Sweden?

Many Swedes think so, and claim that Brexit would be tough for Sweden. Here’s what they’re saying:

1. Sweden would lose a kindred spirit in Europe

If you listen to the debate in Britain, you could get the impression that EU countries gang up to impose their will on the UK. 

In fact, Britain has its own bloc of like-minded countries that often vote with it – Sweden and the Netherlands chief among them. These countries are broadly in favour of free trade and more competition. It was also this group that successfully led the charge for the first ever EU budget cut in 2013.

Sweden voted with the UK in more than 88 percent of votes between 2009 and 2015, according to Votewatch Europe.

“There are lots of reasons for Sweden to be worried. Our partnership with the UK, which like us is outside the euro but inside the EU, is really important for us,” says political commentator and Moderate Party politician Ulrica Schenström, who was ex-PM Fredrik Reinfeldt’s state secretary.

“Britain has done a lot of the heavy lifting for us non-euro countries,” she says. 

Ulrica Schenström

2. Sweden could face pressure to join the euro

Sweden voted not to join the euro in a referendum in 2003, and a poll in May 2015 showed support for joining the single currency at just 15 percent. But leading Swedish bank Swedbank says pressure for Sweden to join would increase if Britain quit the EU.

If, as is more likely in the short term, Sweden doesn’t join the euro, its influence in the decision-making processes will be reduced. “The interests of non-euro members will have less weight,” Swedbank says in its report.

3. The economy would take a beating 

Britain was Sweden’s fourth largest export market for goods last year – and the third largest for services. Sweden’s exports of services to the UK account for about 1.5 percent of GDP. Much of this, says Swedbank, would be under threat if Britain quit. 

“Financial services are a big part of this. These exports wouldn’t disappear overnight, but they would be hurt,” says Swedbank analyst Cathrine Danin. 

“And while it would be relatively easy to get a deal for trade in goods, a deal between the EU and Britain for regulating trade in services would be more complex. In the long term you would need to renegotiate the rules.”

Britain’s exit from the EU is also likely to cause economic uncertainty, which could lead to stock markets falling and the Swedish krona falling in value against the euro (although it would be likely to rise against the pound).

4. From Brexit to Swexit?

Right now only two out of Sweden’s seven parliamentary parties want 'Swexit' – the Sweden Democrats and the Left Party. But if Britain left, this could change.

“If the British leave, Euroscepticism in Sweden will grow. I’m worried we’ll end up in a Swexit debate,” says Schenström. She points to the Sweden Democrats, who are polling at around 20 percent and whose leader, Jimmy Åkesson, has called for a Swedish referendum if Britain quits.

5. Swedes would lose a friend

Swedes and Brits are so like-minded partly because Swedes are so familiar with the UK. London is the most popular foreign destination for Swedes – both for holidays and to live in. 

“We Swedes like Brits a lot. We read British crime thrillers. London is our biggest colony outside Sweden. When I was growing up and hanging out with European youth politicians, we Swedes were always drawn to the Brits,” says Schenström.

With 40,000 Swedish residents, London is indeed the most Swedish city outside of Sweden. More Swedes live in the UK than in any other country apart from the US.

While Swedes would no doubt continue to visit and live in London after Brexit, it could be made harder if Britain quits the EU – not least after a debate in which the anti-EU campaign has focused strongly on EU migration.

6. Russia would take heart

Sweden’s all too aware of the Russian bear on its doorstep – a bear that has been rattling its cage in recent years, with alleged breaches of Swedish airspace, submarine incursions and disinformation campaigns. At the same time, Vladimir Putin is one of the few world leaders not to speak out against Brexit, and many view weakening the EU as a key part of his strategy for projecting Russian power.

Britain was instrumental in pushing through EU sanctions against Russia after its invasion of Crime – a position also strongly supported by Sweden.

“We often forget that the EU is a peace project. Given the threat from Russia, as well as the migrant flows across Europe, I think it’s good if we stick together,” says Schenström.