Sweden hopes Ukraine truce mends Russia-EU relations

Donna Leinwand Leger | USA TODAY

Show Caption Hide Caption Sweden Ambassador to U.S. Bjorn Lyrvall Bjorn Lyrvall, Sweden ambassador to U.S.,talks to USA TODAY about Swedish- U.S. relations.

WASHINGTON — After months of incursions and near misses into Sweden's waters and airspace by Russia, Swedish Ambassador Bjorn Lyrvall said he is still hopeful a cease-fire over Ukraine will take hold and usher in a chance for normal relations with Russia.

Russian behavior in the region is "more than misbehaving. It's blatant aggression," Lyrvall said.

The cease-fire deal with Russian President Vladimir Putin, Ukrainian President Petro Poroshenko and European leaders, set to begin Feb. 15, broadened a previous agreement struck in Minsk in September that collapsed within days. The new deal, which called for an immediate cease-fire, has been marred by fighting over a railway hub and other skirmishes.

Sweden is "welcoming efforts to stop the fighting and implement the Minsk agreement," Lyrvall said. Whether it sticks "remains to be seen," he said. "It's a fragile agreement."

Sweden and Russia border the Baltic Sea. In recent months, Russia has crossed into Sweden's maritime territory and its airspace. An SAS passenger plane avoided a near collision in March with a Russian reconnaissance aircraft that flew within 50 miles of Malmo, Sweden, without announcing its presence. In September, two Russian military aircraft crossed into Swedish airspace near the island of Oland. In October, the Swedish military spent 10 days searching the waters of the Stockholm archipelago after a reported sighting of a Russian submarine, Russia denied it had a submarine in the area, and Sweden abandoned its search after 10 days.

Lyrvall, in an interview with USA TODAY, said he hoped that over time Europe, including Sweden, could restore normal ties with Russia assuming it withdraws support for separatists in Ukraine and respects European borders. Before the territorial dispute, Sweden and Russia were key trading partners.

Sweden is among the top 10 foreign investors in Russia, Lyrvall said. About 400 Swedish companies do business there. Russia is one of Sweden's key export markets for autos, telecommunications and chemicals. Sweden imports crude oil from Russia.

Falling oil prices combined with U.S. and European Union sanctions have crippled the Russian economy.

"We need a climate conducive to business" where the rule of law is respected, Lyrvall said. "We are neighbors. I hope we will get back to the cooperative spirit."

Last week, Sweden's central Riksbank cut its main interest rate below zero, allowing banks to take out loans from the central bank that are paid back for less than they borrowed. Riksbank initiated a $1.2 billion buyback of government bonds, a small stimulus package meant to stave off deflation. Despite a reduction in trade with Russia and a recession that struck much of Europe, the Swedish economy has grown steadily since the height of the financial crisis in 2008 and 2009.

Lyrvall said Sweden would like to increase trade with the USA and supports the Transatlantic Trade and Investment Partnership (TTIP), a trade agreement under negotiation between the European Union and the United States. In addition to spurring trade, such an agreement would spread American and European values on labor standards, rule of law and transparency while countering countries such as Russia that break trade rules, he said.

"There is a lot to gain from this cooperation," he said.