Sweden and the Greek euro crisis

4:30 min

How does the Greek economic crisis affect Sweden?

The crisis has reached a new level as the European Central Bank is refusing to extend its support program. Banks in the troubled country are closed, there's a deadline to pay back loans on Tuesday, and on Sunday the Greeks will be voting in a referendum on whether to accept the latest terms from the International Monetary Fund.

We spoke to Robert Bergqvist, the chief economist of Sweden's SEB bank, and asked him what the consequences are for Sweden, which is in the EU, but not in the Euro zone.

"If this continues, it will have a negative impact on investments and consumption within the euro area," Robert Bergqvist says. "Sweden is so dependent on exports, roughly 75 percent of our exports are to Europe. That could be the factor that has a negative impact on the Swedish economy in the medium and long term.

Swedish Finance Minister Magdalena Andersson said this morning that Swedish bank exposure and trade with Greece are rather small, so the direct effects of the crisis are not large here, but the indirect effects might be. Robert Bergqvist is cautiously optimistic:

"Sweden has a strong balance sheet," he says, "but of course if the uncertainty with Greece continues, it will have an impact on Europe and the euro area, and that will have an impact on Sweden.

What about tourism? Greece is a popular holiday destination among Swedes. Finance Minister Magdalena Andersson recommended that travellers to Greece make sure they have various payment methods, like both cash and cards, and make sure they have travel insurance.

Does SEB's Robert Bergqvist think they should be rethinking their holiday plans?

"I don't think so. I think the Greek government and its agencies will do everything so that the tourism part of the economy will continue to function well, because it's such an important part of foreign capital for Greece."

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