Estonia agrees to repay emergency Swedbank loan

Swedbank learned on Thursday that the government of Estonia was planning to repay the €50 million ($74 million) it borrowed from the Swedish bank to help it through the country’s economic crisis.

Estonia agrees to repay emergency Swedbank loan

“The Estonian finance ministry decided on Thursday that due to the improved economic situation, Estonia will return to Swedbank the €50 million Estonia borrowed in May 2009,” ministry spokeswoman Piret Seeman told AFP.

“We are convinced now that we can manage without the loan,” she said.

The loan will be repaid in full on November 12, she added.

Swedbank is a key player in the financial market of Estonia and fellow Baltic states Latvia and Lithuania. The trio have been among Europe’s hardest-hit nations in the deepest global economic slump since the 1930s.

Sweden has been at the forefront of efforts to shore up their floundering economies, given the heavy exposure of Swedish investors.

When it tapped Swedbank for the loan in May, Estonia said one goal was to increase the state’s liquid assets in the face of slumping revenues.

“There is simply no need to keep that money on our account any more. We can make all the necessary payments from the state budget this year without needing to use that loan,” said Seeman.

“Paying it back now and not in June 2010 — as was agreed in May — will help us save 45 million kroons ($4.25 million)” in interest, she added.

Estonia, which shifted rapidly from a communist command economy to the free market after independence from the Soviet bloc in 1991, had enjoyed a reputation as a “tiger” in the European Union, which it joined in 2004.

This country of 1.3 million people boasted growth of 10.4 percent in 2006 and 6.3 percent in 2007.

But Estonia slid into recession last year, with its economy shrinking by 3.6 percent. Tallinn has warned that output could contract by up to 15.3 percent this year.

However, data indicate that the recession is easing.

Output shrank by a seasonally-adjusted 3.4 percent in the second quarter of this year compared with January to March, after having contracted by 6.0 percent in the first quarter.

Estonia is due to issue third-quarter figures on November 13.

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Swedish bank’s IT fault puts customer accounts in the red

A technical problem at Sweden's Swedbank on Thursday night gave customers a nasty surprise, with their account balances inexplicably going negative, payments impossible, and Swish payments no longer working.

Swedish bank's IT fault puts customer accounts in the red

By 11.30pm, more than 2,000 Swedbank customers had reported the fault to the site Downdetector, and the problem was still not solved by 17.00pm on Friday. 

“We have an ongoing IT disruption where certain customers see an incorrect balance on their accounts,” a message on the bank’s app read. “The reason is a planned update to our internal systems which went wrong. We apologise, of course, for that and are working as quickly as possible to fix the problem.” 

The Swish payment service has also been affected, with the service, which is owned collectively by Swedish banks, reporting on its site that there was a “technical disruption at Swedbank and Sparbank which might affect Swish payments from these banks”. 

Some Swedbank customers posted their negative account balances on Twitter, expressing shock at the incorrect figures. 

The disruption comes at the worst possible time for many Swedes. Many people are paid on the 25th of the month, meaning this Friday marks the start of the payday weekend. Many will have also scheduled their bill payments for this Friday. 

Marko Saric from Malmö saw his account balance drop by 1.2 million kronor, going half a million kronor into the red. 

“It’s just totally crazy,” he told SVT. “We were going to go out and shop for the weekend. It’s lovely weather and the kids want to go out, but we can’t use our card. We’ve got no cash. Everything is in the bank.” 

“You’re just completely blocked. Colleagues need to make emergency food parcels for you. It’s just crazy that something like this should happen.” 

In its statement, the bank assured customers that their money was “secure”, and that the bank still had the correct information on what their account balance should be. 

“Customers who feel that they have suffered economic damage as a result of the disruption should contact the bank,” the message said.