Increasing possibility of prosecution

Lundin Petroleum believes the probability has increased that Board Chairman Ian Lundin and CEO Alex Schneiter will face charges over possible crimes against international humanitarian law in Sudan.

The two were questioned by the Swedish international prosecutor last year and formally notified in November 2016 that they were suspected of committing international crimes in Sudan between 1997 and 2003. Lundin Oil and Lundin Petroleum operated in South Sudan at that time. The CEO and chairman have since been summoned for further questioning in 2017.

“It is not a good sign that the prosecutor has not closed the case,” says a well-informed source to business daily Dagens Industri.

Apoteksgruppen sold to Euroapotheca

Lithuania’s Euroapotheca, which owns around 450 pharmacies in the Baltics, Ukraine and Poland, has signed an agreement with the Swedish government to buy Apoteksgruppen i Sverige Holding (AGHAB) for SEK 1.7 billion.

AGHAB provides franchise and management to 189 pharmacies operating under the Apoteksgruppen brand and will buy out 159 of the 189 pharmacies.

Swedish Enterprise Minister Mikael Damberg is pleased with the process and the price.

The deal is subject to approval by the Swedish regulatory authorities.

Hesitant minister

Sweden’s central bank, the Riksbank, and the Financial Supervisory Authority (Finansinspektionen) are pushing for tougher amortisation requirements in order to curb household debt but Green Housing Minister Peter Eriksson is hesitant, given that the property market is starting to balance.

The National Board of Housing, Building and Planning (Boverket) has said its forecast that 76,000 homes will be built in Sweden in 2017 will not be realised. Ericsson is not concerned, however, saying: “Even if “just” 70,000 homes are built this year, it is still more than last year. And it is only a couple of years since Boverket said we could not build more than 40,000 homes a year.”

A drop in the number of expensive homes under construction is not a problem. On the contrary, it will allow more affordable homes to be built, argues the minister, who does not hold with analysts who warn of a price collapse. “The Swedish economy is strong, unemployment is falling and global growth is also strong. There is little to suggest that prices will collapse,” he says

Liberals outline reform of labour laws

At their party conference this coming weekend, the Liberals will be calling for a change in labour laws, demanding that the Last In First Out principle be scrapped. New, flexible rules need to be introduced in order to encourage movement on the labour market and promote company growth, says the party.

It should be easier for employers to terminate employment for personal reasons, a higher number of employees should be excluded from job elimination and anyone who is made redundant should have a right to severance pay.

Slow wage growth will scupper Ingves’ plans

Central banks around the world are stumped as to why inflation is low and wage growth slow despite the fall in unemployment after the financial crisis. Federal Reserve chair Janet Yellen has even described the phenomenon as a “mystery”.

Sweden’s Riksbank, in particular, has failed to pay heed to one important explanation for the phenomenon, namely the outsourcing of high-skilled services to low-cost countries, claims Lena Hagman, chief economist at employer organisation Almega.

She believes Sweden’s central bank will be forced to delay the planned rise in interest rates and revise down its growth and wage forecasts, saying: “The Riksbank argues that the problem of finding staff will lead to an accelerated wage drift in the affected sectors, as we have been used to in previous economic booms. But that is no longer the case”.

Increase in manufacturing output

The Association of Swedish Engineering Industries (Teknikföretagen) forecasts a 12% increase in manufacturing output in 2017, and a 5% increase in 2018. The high level of output is due to global demand, although the automotive industry is in a lull. In Sweden, however, the automotive industry is fuelling growth in the engineering industries.

New amortisation requirement causes division

The Swedish Financial Supervisory Authority, or FSA, said on Monday that all new mortgage holders who borrow more than 4.5 times their gross income must amortise 1 percentage point more of their mortgage per year than is the case at present. It will now be up to the Swedish government to decide what to do.

Opinion is divided, however. Housing Minister Peter Eriksson has openly expressed his doubts but Financial Markets Minister Per Bolund, who is the responsible minister, has warned of the consequences if the proposal is stopped.

The government intends to hold talks with the opposition, but Per Bolund is keen to stress that it will be up to the government rather than parliament to make a decision.

The opposition parties have in principle already said No to the proposal. Elisabeth Svantesson, the Moderate Party spokesperson on economic policy, argues that such a requirement would stop young people from buying a home and could fuel a downturn.

Consumer assocation demands action

Sweden will take no legal action against Volkswagen over the diesel emissions scandal as prosecutors have no suspicion of wrongdoing against any individual in Sweden.

Following the decision, the Swedish Automobile Association (Motormännens Riksförbund) called on other Swedish authorities to take action.

More than 220,000 cars from Volkswagen, Skoda, Audi and Seat were recalled in Sweden after news of the fixing of diesel emission tests emerged in September 2015.