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Stockholm hopes for gains from Brexit – but still worries about the losses

Stockholm is at a Brexit crossroad. It's time for the Swedish capital to choose its path after its closest friend in the EU leaves the union. Alex Macbeth investigates in this article, also published in The Local's 'Brexit & You' newsletter.

Published: 8 March 2018 15:36 CET

Stockholm hopes for gains from Brexit – but still worries about the losses

Brexit is a two-edged sword for Stockholm. Photo: Henrik Montgomery/TT

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In the landscape of Sjöwall & Wahlöö's Martin Beck novels from the 1960s, Stockholm is a city mid-transformation: old houses are knocked down to give way to the needs of a new post-war economy.

Fast forward nearly 50 years later and Stockholm is once again at a crossroad, albeit businesses and not the city's terrain.

“Before the Brexit referendum, the UK was Stockholm's most important export market,” Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce, told The Local. Germany and Norway are Sweden's.

Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce. Photo: Maria Agrell/Stockholm Chamber of Commerce

“Since the referendum however there have been fluctuations with trade. Businesses are worried about what will come next,” adds Hatzigeorgiou.

The UK is an “extremely important” market for Stockholm-based and Swedish companies, he says. In manufacturing, pharma and financial services, Swedish companies work very closely with the UK.

Truck maker Scania exports heavily to the UK market; AstraZeneca, the UK-Swedish pharmaceutical giant, perhaps best illustrates the intertwined relationship.

While “no company wants to cut down on business in the UK,” says Hatzigeorgiou, Brexit is a two-edged sword for Stockholm, with losses and gains to be made.

“Finance firms we are talking to say we are a good alternative to London,” adds the chief economist at the Stockholm Chamber of Commerce. And UK companies are already relocating to Stockholm or are looking towards the Scandinavian financial services capital for the future.

“We have received, as an estimate, about 40-50 more requests per year from the UK since the Brexit referendum,” Anna Gissler, CEO of Invest Stockholm – the investment promotion agency for the Swedish capital – told The Local.

“We are certain most UK-based companies are still contemplating and preparing in case the Brexit outcome is not beneficial to their type of organisation or business model, and that we will see more definite numbers after the UK has officially exited the EU,” adds Gissler.

Stockholm however is not aggressively lobbying to lure UK businesses in the same way that Lisbon or Milan are. The city doesn't need to, claims Gissler.

“Our data centre industry is booming, we are home to some of Europe's leading fintech companies and we have been, for a long time, a world leader in gaming and music tech. All this creates a virtuous circle of growth that is very attractive to talents and investors”, says Gissler.

A conference for women in tech in Stockholm last year. Photo: Magnus Hjalmarson Neideman/SvD/TT

In 2017, the capital invested into Swedish tech startups doubled compared with 2016. More than 10.5 billion Swedish krona (€1,03 billion) were invested into 442 startups, according to Industrifonden's Swedish Tech Funding Report 2017. UK investors accounted for 32 per cent of all investments, more than from any other country and overtaking the US to claim top spot.

Sweden's 22 percent corporate tax rate is lower than that of Milan or Madrid, and the Swedish capital has the right mix of ingredients for companies caught in Brexit uncertainty and perhaps looking to relocate.

“Stockholm's DNA is symbolized by an open and permissive climate,” says Invest Stockholm's Gissler, adding that the closeness to the UK, Swedes' familiarity with the English language and the cultural similarities make Stockholm an ideal location for British companies looking to bypass any potential Brexit fallout and keep a foot in the EU market.

While Sweden is the second-highest EU27 ranked country in the World Bank's Doing Business rankings, the city is also a victim of its own success. The founders of Sweden's best known tech startup, streaming service Spotify said in 2016 that a housing crisis in Stockholm, where prime office rents per square metre are nearly €700, is preventing the city's ability to attract foreign talent, reported The Local Sweden.

How will Brexit affect Sweden, Britain's closest partner in the EU, and the other EU nations? Sign up for The Local's 'Brexit & You ' newsletter to get a full round-up of Brexit issues from across Europe.

INTERVIEW: 'A lot of people think Brexit is done, but it's not for Brits in Europe'

In the early days of 2021, after the United Kingdom had left the EU and completed the final stage of Brexit, many British citizens returned to their home countries in Europe only to face a grilling at the border.

Though the Withdrawal Agreement (WA) technically guaranteed their right to live and work in the countries they’d settled in before Brexit, there was widespread confusion about these fundamental rights and many were treated like new arrivals.

Over time, the chaos at the airports subsided as border officials and airlines were given clearer guidance on the treatment of Brits. But three years later, a number of Brits who live on the continent still face problems when it comes to proving their post-Brexit rights.

This was the reason campaign group British in Europe decided to set up their new EU-funded ICE project. Starting this year in March, it aims to build valuable connections between UK citizens abroad and mentor the next generation of civil rights advocates around the continent. The acronym stands for ‘Inform, Empower, Connect’ and the project’s organisers describe it as “the first project of its kind”.

“It’s a completely innovative project – especially the fact that it’s across so many countries,” Jane Golding, chair of British in Europe and one of the project’s founders, told The Local.

Bringing together groups from 11 EU member states, the project aims to train up volunteers to understand both the Withdrawal Agreement and EU Charter of Fundamental Rights, as well as learning skills like advocacy and communication, using real-life civil rights cases that are referred to British in Europe.

“The ultimate goal is to amplify the messages across the wider group,” said Golding. “You start with the volunteers, they go back to their groups, then the people that we train, they go back and train people. Then they pass on that knowledge to the wider groups, on their Facebook accounts and through social media, and hopefully it all snowballs, not just in their countries but across the EU.”

‘Far-reaching repercussions’

So many years after Brexit, it’s hard to believe that there’s still a need for a project like ICE that empowers Brits to protect their rights. Indeed, the future of groups like British in Europe and regional groups like British in Germany and British in Spain felt uncertain just a year or two ago.

But Golding says there are still serious issues cropping up for Brits in several countries around Europe – they just have a different quality to the problems that arose at the start.

“In some ways it’s needed even more because as we predicted right at the beginning, at the first stage of implementation, you’ve got the more routine cases,” she explained.

“What we’re seeing now is not as many cases, but when the cases come up, they’re complex. They can have such far-reaching repercussions on people’s lives. And of course, memories start to fade. A lot of people think Brexit is already done, but it’s not.”

Volunteers in British in Europe ICE project

The volunteers of the British in Europe ICE project pose for a photo at the kick-off meeting in Brussels on May 21st, 2024. Photo courtesy of Jane Golding

Though the rights set out in the Withdrawal Agreement apply across the continent, different countries have taken different approaches to implementing them.

That means that while in Germany, for example, UK citizens simply had to declare that they lived in the country, people in neighbouring Denmark had to apply for their rights.

This led to a notorious situation in Denmark in which as many as 2,000 Brits were threatened with deportation after not applying in time or completing the right application process. According to Golding, this had a lot to do with the fact that people who arrived in 2020 weren’t given the same information as other UK migrants who arrived before.

In Sweden, meanwhile, the situation is still difficult for many Brits who lived there prior to Brexit.

“There have been issues with an anomalously high numbers of refusals compared to other countries, and they seem to be taking a very strict approach on late applications,” Golding explained.

Portugal has been another difficult case. Although the country opted for a declaratory system where Brits could simply exchange old residence documents for a new ID card after Brexit, reports suggest that the authorities have taken years to issue these cards, leaving many of the some 34,000 Brits in the country in limbo.

“While people are still waiting to have their status confirmed and have their card in their hand, it’s difficult to access a whole range of services, like health services, or applying for jobs or dealing with the authorities, or even going to the bank,” Golding said. “All of these problems just affect people’s lives.”

A French border guard checks a passport at the border

A French border guard checks a passport at the border. Photo by DENIS CHARLET / AFP

There are also concerns about the EU’s new exit and entry system (EES), due to come into force in October, which is based on biometric documentation.

“We still do not have clear data on how many people in declaratory countries like Germany, where it wasn’t compulsory to apply for the card, don’t actually have a card,” Golding said. “How is that going to play out if it’s a document-based digitalised system?”

A lack of support

In the immediate aftermath of Brexit, funding from the UK’s Foreign, Commonwealth and Development Office (FCDO) was still available to support NGOs in Europe helping Brits with their migration and civil rights issues. But that temporary funding soon expired, leaving groups like British in Europe largely on their own.

“The whole point is people’s lives change at very different paces,” Golding said. “And now this project is really going to start to pick up some of those cases and report on those issues, which is really crucial and exciting for the precedent that it sets, and it’s very clearly necessary still, because people don’t just sort their lives in the 18 months that the FCDO chose to supply that funding.”

This feeling of being left alone and increasingly isolated from the UK is one that many Brits in Europe have felt in the aftermath of Brexit. But the upcoming UK election on July 4th could be a game-changer.

This time, following a change in the law, Brits who have lived abroad for more than 15 years will be able to vote for the first time.

Polling station in the UK

A polling station in the UK. Photo by Elliott Stallion on Unsplash

When it comes to the election, the message from British in Europe is clear: “Make your voice count now, make your vote count, make sure you use it,” Golding said.

With the June 18th registration deadline fast approaching, BiE is advising UK citizens abroad to apply for a proxy vote as soon as possible, rather than relying on a postal vote from abroad. Since the 15-year rule was abolished on January 16th, more than 100,000 British citizens have registered to vote, according to official statistics. It is unclear how many were registered before the change in the law.

With an estimated 5.5 million Brits currently living abroad – 1.3 million of whom are in the EU – this could have a significant impact on the electoral landscape, Golding says. But most significantly, the change is creating a feeling of connection and belonging that wasn’t there before.

Nurturing this sense of belonging is one of the main goals of ICE.

With these bridges being built, British in Europe hopes to create a network of support that spans across borders.

“Now we’ve met. We’re going to meet,” said Golding. “We know we’re going to meet again in Berlin in October and then we’ll meet again in the new year in 2025 as well. It means a huge amount because even British in Europe, our steering team, we’ve only met physically three times.”

This opens up the possibility of people sharing their knowledge from country to country, Golding explained.

“There is crossover and the reassurance of having that EU wide view and knowing that you’re not alone and knowing that in this country, we managed to get this solution,” she said. “And then you can go back and say to the authorities in your country, well, in that country they did that – all of that helps. It’s really good.”

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