Sweden Seeks to Calm Business Fears After Saudi Spat

Sweden's government said Wednesday it would hold urgent talks with business leaders to discuss concerns over trade with Gulf countries following a deepening diplomatic row with Saudi Arabia and criticism from the Arab League.

Sweden last week cut military ties with Saudi Arabia after Foreign Minister Margot Wallstroem accused Riyadh of blocking her from making a speech at the Arab League about human rights.

In response, Saudi Arabia recalled its ambassador, citing Wallstroem's criticism of its human rights and democracy record.

"We've invited company leaders who have business in the Gulf region to a meeting because of the fact that Sweden ended its military cooperation agreement with Saudi Arabia," a spokeswoman for the Enterprise Ministry, Ann Wolgers told AFP.

"There are a lot of questions around what happens now and there's a certain amount of concern among business leaders... When the (Enterprise) Minister Mikael Damberg saw this he decided to organise a meeting so they can ask questions."

The meeting was reportedly scheduled for Thursday. Wallstroem is also expected to attend.

Sweden's relations with Saudi Arabia hit an all-time low last month after Wallstroem described the Gulf state as a "dictatorship" that violates women's rights and whips bloggers.

The Swedish foreign minister later came under fire from the League's members for her criticism of Saudi Arabia's human rights record in the Swedish parliament, which they viewed as an affront to Sharia law.

The United Arab Emirates recalled its ambassador from Sweden Wednesday in solidarity with its Gulf neighbour and said Wallstroem's comments "do not respect the religious and cultural particularities of states and communities."

Swedish business leaders had warned the government that ending its 10-year-long military cooperation with Saudi Arabia -- Sweden's third largest non-Western destination for arms sales -- could have far-reaching consequences.

Some of them openly questioned the government's handling of the issue.

"If you make an enemy of the Arab League it can cause very major damage," Leif Johansson, chairman of telecoms group Ericsson, told business daily Dagens Industri.