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Sweden mulls Irish loan due EU economic worries-gvt

Published 11/22/2010, 02:28 AM
Updated 11/22/2010, 02:32 AM

STOCKHOLM, Nov 22 (Reuters) - Sweden's offer to lend money to Ireland as part of a wider bailout is due to worries that Dublin's woes could hit the European economy, the Nordic state's finance minister said.

Swedish Prime Minister Fredrik Reinfeldt said on Saturday his country would consider lending to Ireland.

In a statement released late on Sunday, Finance Minister Anders Borg said the government was ready to help Ireland in the same way it previously helped Iceland and Latvia.

"Worries over Ireland are a risk to financial stability in Europe, which could brake the recovery and lead to a deeper drop in the economy," Borg said.

He said the government wanted to have broad support in parliament for any loan to Ireland.

Sweden heavily relies on exports and has benefited from a return of demand in key trading partners in the European Union.

It has warned that one of the risks to its forecast of further growth is that fiscal worries in the EU would dampen demand.

Sweden made loans to Iceland after its top three banks collapsed. Sweden then contributed to the bailout package for Latvia as Nordic banks were heavily exposed to the Latvian economy and those of the other Baltic states. (Reporting by Patrick Lannin:Editing by Tomasz Janowski)

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