Foreign Affairs Minister Murray McCully has announced the closure of the Stockholm embassy in Sweden as part of $10 million of savings in the Ministry's European posts.

The Stockholm post was opened by the Clark government in 2008 and was downsized by the current government in 2009.

"New Zealand enjoys an excellent relationship with Sweden and with its Scandinavian neighbours, but in today's world it is not always necessary to have a diplomatic presence to maintain such a relationship,'' said Mr McCully.

"Sweden does not have an embassy in New Zealand and I am confident that we can manage the relationship through an accreditation.''


The closure will be accompanied by other closures that the minister said would save about $10 million per year among New Zealand's European posts, including moving into less expensive accommodation.

The move is part of a series of decisions that will enable the Ministry of Foreign Affairs to meet the Government's expectations of a $24 million efficiency dividend and then managing with a flatline budget for the next two years.

Over the coming days the Chief Executive of the Ministry of Foreign Affairs, John Allen, will formally release a decision document to staff that responds to the feedback he has received on the original change proposal.

"The proposal has been significantly amended to take into account concerns raised during the consultation process,'' said Mr McCully.

"On March 21 I released a letter I wrote to the Chief Executive setting out concerns held by ministers in relation to the original proposal. These concerns have been addressed by the Ministry's leadership team in the preparation of the final decision document.''