Brexit ‘Compromise’ Is the Word Used in Stockholm These Days

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Ann Linde.

Photographer: Jonas Ekstromer/AFP via Getty Images

Sweden struck a conciliatory tone as the government in Stockholm underscored its interest in keeping the U.K. as close to the European Union as possible.

Amid speculation over whether the remaining EU states will force Britain into a “hard” or “soft” exit from the bloc, Sweden affirmed its commitment to doing what it can to facilitate a constructive set of negotiations.

“We will try to get the rest of the EU to find different kinds of solutions,” Ann Linde, Sweden’s EU minister, said during a panel debate on Monday at Bloomberg’s Stockholm office. “Maybe there will be, when you negotiate, there will be some kinds of compromises on both sides.”

For the largest Nordic economy, the stakes are high. Six percent of Swedish exports go to the U.K., making it the country’s seventh-largest trade partner. There are also roughly 100,000 Swedes living in the U.K. and some 1,000 Swedish companies operating in Britain, all wondering what the future holds since the June 23 referendum.

Anders Borg, a former Swedish finance minister who now advises Citigroup Inc., says “it’s important for Sweden to be one of the voices that argue for a pragmatic approach with the U.K. The best solution would be as open a free-trade agreement as we could ever find.”

Economic Damage

The U.K. meanwhile is moving closer to accepting it will lose its direct access to the EU’s single market if it is to achieve its goal of restricting immigration, which was the cornerstone of the pro-Brexit campaign.

Clemens Fuest, president of the German Ifo economic institute, said in a Bloomberg TV interview on Tuesday that the EU should offer the U.K. some leeway to limit migration to avoid a hard break with Europe’s economy that would hurt both sides.

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Linde cautioned the U.K. against thinking it can win too many concessions, pointing at the terms that former Prime Minister David Cameron secured before the June vote.

“The deal that Cameron got before the referendum was not very far-reaching,” she said. “I think that the U.K. or Cameron had hoped for a more far-reaching deal before the referendum and that shows how difficult it really will be.”

For now, with the British stance unclear as it prepares to invoke Article 50 at some point early next year, Linde said it remains unclear what path the U.K. will choose.

“A two-year period is a very short time to do a good trade deal and everyone will have to be very responsible, both in the U.K. and in the EU,” she said. “Sweden will seek to play a role and be as constructive as possible to avoid steep demands in one way or the other.”

Swedish ministries have prepared dossiers on the impact of Brexit that have been collated into hundreds and hundreds of pages, Linde said. These are now being poured over by a task force to see how best to protect Sweden’s interests, she said.

“There will be very tough discussions about the relationship between the EU and the U.K., but our absolute interest is to keep both good relations with the U.K. and the EU’s strength in the four freedoms” of the free movement of people, capital, goods and services, she said.

Linde declined to comment on any red lines for negotiations. But for Sweden, the upshot remains that ultimately, “the EU is more important,” she said.

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