Sweden’s centre-right alliance parties promised investment in a new high-speed rail network prior to the 2014 general election, but afterwards the Moderates and the Liberals abandoned the project. The pendulum now appears to have swung back, however, with a number of senior Moderates, including Catharina Elmsäter Svärd, the former infrastructure minister, calling on party members to back a new financing plan for such a network.
Similar calls are also being heard among Liberals; Anita Jernberger, from the Östergötland region, says politicians must dare to believe in the project, which would allow Sweden to connect to the planned Denmark-Germany undersea Fehmarn tunnel
Telia is being fined USD 965, around SEK 7.7 billion, for having bribed those in power in Uzbekistan. The company has reached agreement with the American authorities over corruption accusations and has admitted paying bribes of around SEK 2.6 billion.
The sum is in line with expectations and the company has made provisions for it. The sum is made up of a fine of around SEK 4.4 billion and a further SEK 3.6 billion for profits that they are considered to have made from paying the bribes.
CEO Johan Dennelind writes in a press release that the deal puts an end to a sad chapter in Telia Company’s history.
The government has been generous with the budget because of the coming election, according to chair of the Confederation of Swedish Enterprise (Svenskt Näringsliv), Leif Östling, who calls it “a typical Social Democrat election budget”.
Collector Bank’s chair Lena Apler agrees, “You can tell we are approaching an election year They are flirting with families and pensioners.” Meanwhile Rune Andersson, chair of Mellby Gård predicts the economy will overheat and wants to see more austerity.
Leif Östling is not impressed with the budget from a business perspective either. “The business world is getting quite a large number of tax increases over the year.” Former chair of Svenskt Näringsliv Jens Spendrup points out that there needs to be more new business in the country because that is where new jobs are created.
Leif Östling wants a review of the tax system for wage earners, pointing out that it makes it difficult for Swedish companies to recruit from abroad.
Volvo Cars is doubling its investment in its plant in the USA. According to reports in South Carolina, Volvo is increasing its investment from USD 500 million to USD 1 billion. It will also more than double its workforce, from 2,000 to 4,500.
According to the original plans, the plant is to manufacture the S60. The capacity is said to be 100,000 although to begin with 60,000 cars will be built per year, of which 60% will be exported worldwide, except China.
The Financial Supervisory Authority (FSA) intends to ensure that Nordea’s capital requirement remains as high as it is currently, even after the bank moves its headquarters to Finland.
In an interview with Dagens Industri (DI), the head of the FSA, Erik Thedéen, says that the Finland is move is “completely unique”. “It is also the first time a large bank, with exposure to the whole of the Nordic region comes under the jurisdiction of the European Central Bank (ECB),” he adds.
He does not believe Nordea’s move is a sign that Swedish regulation has gone too far. “When you say that our requirements are too demanding, then you are forgetting that these requirements are made in an environment typical to Sweden, which is concentrated and interlinked.”
When the move is made, the FSA no longer has responsibility for supervising Nordea and it could mean a lower capital requirement for Nordea. The FSA has already started talks with the ECB and Erik Thedéen wants to push for the ECB to ensure the current capital levels are maintained.
Several of the country’s leading economists consider there to be a desperate need for new structural reforms, but the government is showing no sign of dealing with the problems. The last real political structural reform was the employment tax deduction brought in by the alliance government in 2006.
In particular economists are worried about the housing and labour markets. Annika Winsth is head economist at Nordea and describes a generation of politicians that are incapable of taking on the major challenges that Sweden is facing just now. She is unimpressed with Finance Minister Magdalena Andersson’s autumn budget. “I think it is inappropriate to push forward with extensive stimulation when we already have the tendency to overheating. Furthermore, becoming bound to permanent increases in spending when you know that worse times lie ahead is risky. Long-term structural reforms would have been desirable,” she says.
Nordea’s CEO Casper von Koskull held a secret meeting on Tuesday with a number of minority shareholders, including AMF, Swedbank Robur and the AP pension funds, in an attempt to convince them that a move of the bank’s head office to Helsinki is in their best interest.
A move will require the approval of at least two-thirds of shareholders at next year’s AGM, but some of the larger minority shareholders are said to be sceptical to the plan. “As a shareholder in Nordea, you have to ask yourself if the value of your investment may decrease with the Finnish tradition of running a company,” says one shareholder who wishes to remain anonymous.
Chinese investment in the EU increased by 75 per cent in 2016 and amounted to EUR 35.1 billion, according to the Rhodium Group. Concerns that China could gain control of assets affecting national security have led heavyweight nations such as Germany, France and Italy to urge a rethink of foreign investments in the EU, and in a speech today, Wednesday, European Commission President Jean-Claude Juncker is expected to lay out plans for a more robust screening of trade.
The Swedish government is opposed to more thorough vetting of foreign investments, with EU Affairs and Trade Minister Ann Linde describing the move as “protectionist”. “I believe the opportunities the WTO agreement gives Sweden and other EU member states are adequate,” she says.
In contrast, Thomas Lagerqvist, chair of the Sweden-China Trade Council, welcomes a discussion on tighter screening, saying: “It is naïve of Sweden to believe there is no risk”.
Despite conflicting views on a number of issues, EU Affairs and Trade Minister Ann Linde recognises that both Sweden and Russia share an aim to work towards realising the huge potential in bilateral economic relations.
Writing in Dagens Industri , ahead of her visit to Russia on 12-13 September, the minister points to areas of cooperation between the two countries, including trade, organised crime, culture and student exchange, and underlines the fact that Sweden is the fifth largest direct investor in Russia, discounting tax havens. By way of example, one Swedish company has invested close to SEK 60 billion in Russia since 2001.
Trade between Russia and Sweden amounted to some SEK 48 billion in 2016 and there is potential for Swedish exports to grow. The Russian government’s aim is to invest in energy efficiency and environmental protection, and Linde looks forward to discussing ways to boost cooperation in these, and other, areas with her Russian counterpart.
On Thursday Nordea held a press conference at its Helsinki, which will next year host key employees who will be moved from Stockholm.
When asked why it was not enough that the Swedish government backed down over the resolution reserve fee, CEO Casper von Koskull said, “Nordea is a bank with four domestic markets. We are also a very large bank. It is therefore difficult to exist under one regulation that is based on one country.” For him it is a natural step to become part of the European banking union and be regulated by the Single Supervisory Mechanism, SSM.
He also comments that there never was any negotiation. “We have not been shopping around.” Instead the bank has carried out a thorough analysis.
Meanwhile Swedbank is in a good position to take over dissatisfied customers who leave Nordea, says Swedbank’s head of press Josefine Uppling.
Prime Minister Stefan Löfven understands that many Swedes are upset. “Here we have a bank that has twice received significant help. The whole reason the bank exists is because of Swedish taxpayers and the thanks for that is: we are moving the head office,” he says.