Sweden will oppose any additional sanctions against Iran, fearing the potential repercussions for a major deal between the Swedish telecommunications company Ericsson and Tehran, Haaretz cited an unnamed Foreign Ministry source as saying on Sunday.

Ahead of this week’s meeting of EU foreign ministers in Luxembourg to vote on further sanctions, the Israeli official said that “in Sweden they fear that if the deal between Ericsson and Iran is canceled, this could have implications for the company’s other deals.”

He added that “the Swedes fear that other countries with problematic human-rights records, such as China, will hear about the cancellation and worry about their ties with Ericsson.”

In October 2011, Bloomberg reported that Ericsson had supplied technology to the Iranian cell phone provider Irancell that enabled the tracking of cell phone users. Bloomberg reported that the Iranian government had used the technology to keep tabs on opposition activists.

Haaretz cited the Foreign Ministry source as saying that several European embassies in Stockholm had lodged official complaints to the Swedish Foreign Ministry regarding the Swedish position on sanctions. Swedish officials reportedly replied that only the Iranian people were truly hurt by the sanctions, and that the regime would not be induced to change its policies.

According to the official, one senior German diplomat referred to Sweden’s behavior as “embarrassing, absurd and illogical foot-dragging.”

While Sweden is the largest EU member to oppose additional sanctions on Iran, it is not the only one: Greece, Malta and Cyprus have also expressed opposition to further economic measures against Tehran. Because any decision by the EU foreign ministers must be unanimous, the objections raised by these four were expected to significantly dilute the new round of restrictions to be agreed upon this week.

Some countries, including Germany, Italy, France and the UK, have proposed a full trade embargo on Iran, a move that will most likely not be approved at this point.

The new sanctions to be discussed will include trade deals (except for food, medicine and humanitarian equipment) and a ban on banking, technology, various metals and spare parts for oil tankers.

In addition, the list of “legitimate trade” goods is expected to be shortened, and a blanket ban on natural gas imports from Iran will be deliberated.

EU companies will be required to receive governmental approval before conducting any business with Iran, even when the actual products have not been restricted.

TFinally, Iranian tankers would be forbidden to sail under any EU flag, thus crippling Iran’s ability to market oil worldwide.