Sweden would be the “least worst off” country in Europe in the event of a Greek exit from the euro, Riksbank Deputy Governor Karolina Ekholm said.
The largest Nordic economy’s direct exposure to Greece is “negligible,” she said in a speech in Stockholm today. It’s harder to quantify indirect exposure, she said.
Sweden, a European Union member that has not adopted the euro, has emerged as a haven for bond investors as leaders struggle to contain the region’s debt crisis.
Spain over the weekend became the fourth euro nation to seek a bailout as finance ministers agreed on 100 billion euros ($126 billion) in aid for the country’s banks. The plan comes before the June 17 elections in Greece that may propel Europe’s most indebted nation to exit the currency area amid opposition to the bloc’s rescue terms.
Ekholm, who has argued for bigger rate cuts than the majority of the Riksbank’s six member board, said in an interview that she saw no real alternative to not helping the Spanish banks. The anticipated move will have little bearing on the bank’s next rate decision, she said.
Sweden’s 10-year yield rose four basis points to 1.49 percent today, as yields on 10-year Spanish debt gained 11 basis points 6.61 percent and Italian yields jumped seven basis points to 6.09 percent. Benchmark German bond yields rose seven basis points to 1.26 percent.
Swedish policy makers will announce their next rate decision on July 4. The bank kept rates unchanged in April after cutting them twice since December after the economy contracted in the fourth quarter.
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