Government announces tax cut for pensioners

The government has announced plans to cut taxes for pensioners. The proposal means that seniors over 65 with a pension of SKr 14,000 per month will receive an estimated tax cut of SKr 200 each month. Those with a pension of SKr 19,000 per month will receive a cut of SKr 160. Around 1.4 million pensioners, corresponding to 70% of those aged 65 and over, will benefit from the change.

In the run up to the 2014 general election the Social Democrats promised to close the gap between pensioners and those in gainful employment. Announcing the news on Wednesday, Finance Minister Magdalena Andersson said the cut was a step in the right direction.

The measure, which will be presented in the autumn budget, is expected to cost the Treasury SKr 2.1 billion.

No winners in event of trade war

Two months into protectionist Donald Trump’s presidency, WTO Director General Roberto Azevêdo warns of the risks of a global trade war.

Speaking to Svenska Dagbladet ahead of his visit to Stockholm today, Thursday, the WTO head says he hopes a trade war can be avoided. “There are no winners in a trade war, only losers,” he remarks.

He does not believe there will be a return to the global trade growth of 8 to 9% seen in the years prior to the financial crisis, but there is no reason why it should not pick up to 5%, although this is unlikely to happen any time soon.

Roberto Azevêdo is cautious about drawing any swift conclusions over US-China relations, convinced the two nations will reach agreement despite difficulties.

Diplomats in Washington are unsure about the direction the US may take on trade policy and the WTO head is in a similar situation. “I don’t actually know if Trump is for or against trade. What I am hearing, however, is that the Americans consider the WTO an important organisation and that they are for free trade but against unfair trade,” he says.

Swedish banks and firms drawn into Russian Laundromat

In 2014 a group of journalists working with the Organised Crime and Corruption Reporting Project (OCCRP) broke the story of the “Global Laundromat” – an operation whereby money was moved out of Russia between January 2011 and October 2014. Much of the money was moved out of the country via Trasta Kommercbanka in Latvia and Moldindconbank in Moldova, and investigations were subsequently launched in Latvia, Moldova, the UK and Russia.

OCCRP journalists have since gained access to information allowing investigators to track how USD 20.8 billion was moved from Russia. Detectives believe the true figure could be as much as USD 80 billion, or SKr 700 billion, according to The Guardian. As a comparison, Swedish government expenditure in 2017 is expected to be in the region of SKr 970 billion.

According to OCCRP, Sweden’s big four banks as well as Danske Bank and Norwegian DNB, are among the hundreds of banks that have processed the money. OCCRP also says that Ericsson and fastening tool company Isaberg Rapid have received money transfers of USD 1.3 billion and USD 153,000 respectively.

Ericsson says it does not normally comment individual transactions, but this was a single payment for one of its customer contracts. “We don’t know today why the payment was made by a company other than the customer, but in light of the information that has now emerged, we will take a closer look at this payment and see if we have adequate procedures and control mechanisms,” states the company.

Minister on warpath

Financial Markets Minister Per Bolund (Green) tells Svenska Dagbladet that the Swedish Financial Supervisory Authority (Finansinspektionen) will be given greater powers to stop those fund companies that charge high commissions for poorly performing funds. “They have no place on the Swedish market,” he says.

Stockholm attracting cruise lines

At least 270 cruise ships carrying a total of 650,000 passengers will call in at Stockholm this year, generating revenues of SKr 600 million. This is a significant increase on last year, and there are a number of reasons why, according to Henrik Widerståhl, deputy MD at Ports of Stockholm. The Swedish capital has become an attractive destination at the same time as cruise tourism is taking market share. In addition, the Mediterranean security environment has led some shipping lines to reroute to the Baltic instead.

Rollén keeps working

Hexagon is not wavering an inch in its support for CEO Ola Rollén, accused of insider trading. Hexagon’s incoming chair Gun Nilsson says, “There is strong evidence that demonstrates Ola Rollén’s innocence. His handling of this frustrating situation has demonstrated that he is an exceptional leader.”

On the other hand Økokrim, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, is unwavering in its belief Rollén is guilty. Marianne Bender, prosecutor at the agency, says that they are convinced they can demonstrate he has committed punishable offences. However the conviction the prosecutor is seeking remains confidential until the trial.

The measuring technology company Hexagon has appointed lawyer Hans Strandberg and his law firm Nordia for an independent inquiry alongside Ola Rollén’s defence. Ola Rollén remains as CEO just now.

“Our alternatives to new aviation tax”

In Dagens Industri today Christian Clemens, BRA, Rickard Gustafson, SAS and Bjørn Kjos, Norwegian, address the government’s plans for an aviation tax stating there are more effective ways of tackling emissions than through the “symbolic” tax and present “joint targets for how Sweden can lead the way for more sustainable aviation by 2030”.

The Swedish aviation industry has a joint ambition to halve fossil carbon dioxide emissions from domestic flights by 2030, from 2005 through more effective aircraft and a higher proportion of bio-fuels.

The entire aviation industry, they write, is working to create a market for large-scale bio-fuel production. Investing in more fuel-efficient planes is significantly more effective than bringing in an aviation tax. They believe the proposed tax would reduce accessibility and potential for growth. Under the first year alone it is estimated the aviation tax would mean 7,000 fewer jobs and GDP loss of almost SKr 4 billion. In the best case scenario the tax would bring emissions down by 0.2%. Sweden needs aviation not least to achieve the government’s goal for regional growth.

M: companies being driven out the country

After Nordea’s threat to move its head office out of Sweden the Moderates have attacked the government. Ulf Kristersson, the party’s economic spokesperson, says, “We are driving companies out of the country with the policy the government is threatening to bring in.” He says Sweden needs more head offices, not fewer.

Nevertheless Finance Minister Magdalena Andersson is not fazed by Nordea’s threat. “If they place their head office in another country then it lowers the risk for Swedish taxpayers in the case of a crash,” she says. She points out that the banking sector is healthy, has high profits and the fees have not created any problems. She also emphasises that Nordea made billions of kronor in profits last year.

The proposal is now out for consultation.

EU should not control Swedish forestry

“It is unacceptable that Sweden is entering these negotiations without a clear stance,” write Helena Jonsson, chair of the Federation of Swedish Farmers, LRF, and Sven Erik Hammar, chair of the Federation of Swedish Family Forest Owners in Dagens Industri today of the EU’s negotiations on climate and land use, LULUCF.

Swedish forests absorb 50 million tones of carbon dioxide equivalents, which can be compared to Sweden’s total emissions of 60 million tonnes. Forestry means we can benefit from timber products where if fossil-based products were used instead current CO2 emissions would double.

If the EU Commission has the last word on forest reference levels (annual net absorption of carbon dioxide in the forest) then if felling crosses this reference level the forest will be considered to have net emissions, despite that there is in actual fact net absorption of CO2. They ask the government whether it wants the EU to control Swedish forestry and demand politicians show leadership. The EU directive is a threat to the climate benefits of Swedish forestry.

State giant raises alarm

The state owned airport company Swedavia has warned against the proposal to introduce an aviation tax, stressing the negative impact it will have. The company, which owns and runs ten airports including Arlanda and Landvetter, believes the proposal should not be implemented.

CEO Jonas Abrahamsson says, “The tax is being motivated by climate reasons however the state investigation shows that it leads to very limited climate benefits and that the total carbon dioxide emissions could in fact increase.” At the same time the tax would have very serious consequences for Sweden’s competitiveness.

Abrahamsson says the airlines have been clear that they may be forced to close existing routes and it would be harder to attract international airlines to establish new routes.

At the same time Swedavia’s airports broke passenger volume records last year after an increase of 5% to 39.5 million.