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What does the ‘exceptionally weak’ Swedish krona mean for you?

Ignoring a few months in the financial crisis, the Swedish krona is now weaker than it's been in a century. What does that mean for internationals planning to moving here, or those who already have?

What does the 'exceptionally weak' Swedish krona mean for you?
The weak krona means executives coming from Europe and the US will be able to buy a more expensive house. Photo: Hasse Holmberg/TT
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The krona dropped still lower last week after Sweden's central bank signalled that with inflation still stubbornly under target there was now no chance of an end to negative interest rates this summer. You now need 10.6 kronor to buy a euro, up from 8.2 back in 2012. 
 
“It's quite clear that the krona is exceptionally weak,” Andreas Wallström, Chief Analyst at Nordea Markets, tells The Local. “Apart from the financial crisis, you have to go back 100 years to find it weaker…although of course the euro didn't exist back then, so it's sort of a synthetic euro.”
 
He doesn't expect change any time soon. 
 
“There's currently nothing really pointing to a strengthening of the krona. If you look at growth relative to the eurozone, we are really in for a slowdown now, whereas growth in Europe is quite strong.” 
Richard Falkenhäll, Senior FX Strategist at SEB, agrees:  “We have probably, along with Switzerland, the lowest short-term interest rates in the world right now, at -0.5, and that's despite several years of very strong growth.”
 
“That's a very negative thing for the Swedish krona, so I think we have to get used to a weaker Stocky [krona] at least this year and probably into next year.”  
 
If you're a tourist, of course, this is wonderful news: a pint of beer that would have cost you a jaw-dropping nine euros five years back now costs under seven.  
 
But if you're an international who's come to Sweden to work, or is planning to, it's rather less appealing. 
 
“You should make sure that you don't get paid in Swedish krona,” Wallström says, slightly tongue-in-cheek. 
 
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Jamie Hart, Managing Director at the recruitment firm Michael Page in Stockholm, says the low exchange rate is less of a problem for a foreigner negotiating their salary ahead of a move to Sweden, as their pay will normally be set by the real cost of living. 
 
“It will just cost the companies more to match up to the euro equivalent,” he says. “Generally speaking if you're recruiting people, the exchange rate is not what you base pay on, it's based on the cost of living.” 
 
People moving to Sweden may also find buying a house is a less daunting prospect that it was. 
 
“As the housing market in Sweden has lost about 10 percent in the last year, at least in Bromma where I work, you are getting a double effect,” says Pär Gunnarsson, who works for Swedish estate agents Fastighetsbyrån. 
 
And while he hasn't noticed an increase in the number of foreign buyers, he suspects those that come are able to spend more. 
 
“When you buy a house in Stockholm or Sweden, it's basically because you're moving here, and you buy the house you can afford. I don't think we have more foreign buyers in Stockholm, but maybe they can buy a more expensive house.” 
 
The exchange rate is more of an issue for workers who negotiated a pay deal back in 2012, when the krona was much higher.
 
If you negotiated an annual salary of 800,000 kronor back then, you've now taken a pretty substantial €21,000 cut in your annual euro earnings. 
 
“For an expat today having an income in krona, you probably just have to get used to earning less,” Falkenhäll says. “It's the same for us Swedes. It's starting to get quite expensive to travel abroad.” 
 
But Wallström believes it's not all bad news, as the low exchange rate combined with strong global demand is leading to boom times for Swedish exporters. 
 
“Swedish exporters are enjoying happy days and there is a  labour shortage in many sectors, so the demand for foreigners is likely to increase,” he says. 
 
Those already working in export-driven industries are in a powerful position to negotiate a pay increase, while those applying for jobs can probably afford to be quite demanding when it comes to salary. 
 
“There's a big demand for international skillsets particularly in the technology field, digital and engineering,” Hart says. “There's a big demand for people who want to move.” 
 
For many of people he recruits from the UK and Europe, salary is not the only reason to move to Sweden anyway. 
 
“There's upside in terms of quality of life, the length of your commute, the number of hours you work,” he says. “There's still positives about working in Sweden.” 
 
Still want to move to Sweden? Looking for a new job? Find your dream English-language role on The Local Jobs.
 

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What happens if you don’t pay a bill in Sweden?

Sweden's Enforcement Authority is responsible for collecting unpaid debts, fines, and declarations of bankruptcy. So, what happens if an unpaid bill reaches the Enforcement Authority, and can you do anything if you have a black mark on your record?

What happens if you don't pay a bill in Sweden?

What happens when you have a bill?

Usually, if you have a bill in Sweden, you will receive an invoice (faktura) either digitally or via post, which will include details such as the amount owed, who to pay and the date payment is due (förfallodatum).

If you don’t pay the invoice in time, the person you owe money to may turn the case over to inkasso, or a debt collection agency, who will again send you an invoice for payment, plus the agency’s fee.

If this invoice goes unpaid, the Enforcement Authority will get involved.

The Swedish Enforcement Authority, Kronofogden in Swedish, is responsible for collecting unpaid debts. It does this by providing advice and support to those who are unable to pay their debts, as well as helping creditors – such as, for example, landlords whose tenants have not paid their rent.

The debt collection agency will pass unpaid bills on to them, and you may receive a betalningsanmärkning or black mark on your credit record.

Before you receive a black mark, however, you will first receive an ansökan om betalningsföreläggande from the Enforcement Authority. If you pay this in time, your debt will not be registered as a betalningsanmärkning.

There are some types of payment where you can receive a betalningsanmärkning without the bill going through a debt collection agency first. These are usually payments owed to the state, such as unpaid tax, unpaid student loan repayments or unpaid municipal parking fees.

You are unlikely to come into contact with the Enforcement Authority unless you miss or forget to pay a bill.

What happens if you get a black mark?

A black mark can have pretty major consequences – it can stop you from hiring a car, getting a credit card, borrowing money (including getting a mortgage), taking out a phone contract or even renting an apartment, as well as barring you from ordering anything on credit or paying via invoice.

This is due to the fact that whenever you apply for a loan or credit in Sweden, the lender will check your credit score (kreditupplysning) to see if there is any risk of you not paying up. Many lenders have a strict policy on not lending to individuals with black marks on their credit score to minimise risk, no matter whether the mark is due to an unpaid phone bill or a missed mortgage repayment.

How can I check if I have one?

You can check if you have a black mark by contacting a credit check company – here is a list of all credit check companies in Sweden. Some may charge a small fee for the service, whereas others offer it for free.

One advantage of checking your own credit score before contacting a lender is that your credit score is not affected when you carry out a check on yourself. 

If, however, a bank carries out a credit check on you, this can affect your credit score – it’s usually not an issue if you carry out one or two checks, but a lot of checks in a short period of time could cause issues.

Can you do anything to remove it?

Unfortunately, no. 

All you can do is wait – a black mark will disappear from your record after three years for private individuals or five years for businesses. 

The best strategy is to avoid getting a black mark on your record in the first place – such as by paying your bills via autogiro (direct debit), keeping an eye on your post (as well as your digital post), and paying for items up-front if possible to avoid invoices, rather than using “buy now, pay later” credit services such as Klarna or Clearpay.

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