So far, The Swedish Finance minister Borg has done a good job, I think (apart from the Swedish Bank bailout plan. Got the impression it was a very hasty one with no real incentive for banks with a competitive advantage to join in.) He has kept a very firm and sound line in many issues.
Now, however, it seems to me he has lost his way.
Instead of having to bail out SEB, Swedbank and Latvia once. It now seems he is in the process of doing it twice. Even if the currency regime, against all odds, would hold, they would need more money still. Reason is the nuclear meltdown of the economy. It has started, and if other countries with floating currencies think they are having a tough time, they have no idea. Not compared to a country with a fixed currency regime. Likelyhood is thus very high there will be a deval in the end anyway. With Mr Borg and the Swedish taxpayers paying twice.
Mr Borg, his advisors and the Riksbank should know better. Or is it the Swedish banks lobby that has talked him into it?
Admittedly the ECB seems to be in the same corner. That is not necessarily an advantage though. I would suggest using the EU funds to guarantee the Emerging markets bankingsystems instead. Perhaps something for Mr Borg? And oh, your very own Swedish banks IS the bankingsystem in Latvia and the Baltics, Mr Borg.
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