Hard Brexit would cost over 8,000 Swedish jobs: report

Hard Brexit would cost over 8,000 Swedish jobs: report
Commuters at Stockholm's Central Station. Brexit is set to have a disproportionate impact on Sweden's capital. Photo: Fredrik Sandberg/TT
A hard Brexit could cost Sweden 8,200 jobs and 18 billion kronor (€1.7 billion) in lost GDP by 2020, a new report has predicted.

The report, from the Stockholm Chamber of Commerce and Oxford Economics, predicts that Stockholm will be particularly badly hit thanks to the Swedish capital's strong financial and business service sectors and their deep links with London. 

The UK is Sweden's fourth largest export market, and in 2015 it was Stockholm's largest export market. 

The report says that if the UK left the EU next year on WTO terms – the hardest possible Brexit – Swedish GDP would end up 0.3 percent lower than it would otherwise have been. The accumulated loss would be 18 billion kronor by the end of 2020. The UK however, would fare even worse, with GDP falling 2 percent. A soft Brexit, with a wide-ranging free trade agreement, would cut Swedish GDP by 0.2 percent over the following decade.

Swedish EU Minister Ann Linde said the report underlined the negative consequences of Brexit for Sweden:

“The report confirms our earlier expectations: Brexit in any form will negatively affect trade with the UK,” she said at the launch of the report, which was attended by The Local. She also criticized Britain's negotiating position:

“The UK has not formulated its position. It has principles, but we need details,” she said.

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Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce and one of the authors of the report, said a soft Brexit was not guaranteed:

“It's still far too early to dismiss a hard Brexit scenario, because of the many difficult issues left to solve. This is why Brexit remains an issue of concern for the whole of Sweden.”

Ulf Pehrsson, vice president of telecom giant Ericsson's government and industry relations, was downbeat about the effects of Brexit on Swedish business:

“It will be negative. Trade and investments will be negatively affected,” he was quoted as saying in the report.

For white goods maker Electrolux, the effects of Brexit were already apparent:

“The UK market has lost momentum and demand has fallen since the fourth quarter 2016. In 2017, demand was down 5 percent on the previous year,” said Jonas Samuelsson, the company's CEO.

Significant connections include the British-Swedish pharmaceutical company AstraZeneca. While Jan-Olof Jacke, CEO of AstraZeneca Sweden, says the company sees Brexit as a challenge for the entire Pharma sector, he also said it was extending its operations in Södertälje, near Stockholm, in response to Brexit:

“To date, we've quality tested new drugs in the UK, but now we need to be prepared to do this in Sweden,” he told the report's authors.

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