Dispute over council’s independence

A dispute has broken out between a number of Sweden’s top economists and the government, which wants MPs from the Committee on Finance to have a say as to who is to be appointed to Sweden’s influential Fiscal Policy Council (Finanspolitiska rådet).

The council, whose remit is to provide an independent evaluation of the government’s fiscal policy, has frequently criticised government policy.

Professor John Hassler warns that there is a clear risk of politicisation and that the council might as well close down.

Concerns raised over tax proposal

Earlier this year a government-commissioned inquiry proposed that real estate sales in so-called packaging companies should no longer be tax exempt. The CEOs of Swedish property companies, who were asked to comment the proposals, have now submitted their findings to the Ministry of Finance and the general consensus is that a tax hike of some SEK 17 billion on the sector would curb construction, create financial unrest and cause rents to soar.

Disagreement over coal-powered plants

Negotiations to revise the EU’s emissions trading scheme have reached a deadlock after the European Parliament rejected a bid from member states that would have seen EU funds being invested in the modernisation of coal-powered electricity plants.

While disappointed over the standoff, Jytte Guteland, a Social Democratic MEP and member of the European Parliament’s environment committee, is relieved that a responsible decision was taken.

One of the key points of debate is how to fund industry’s shift to cleaner power. Guteland says MEPs agree that EU funds cannot be used to “lock Europe into a fossil-fuelled future”.

SEK 10 million extra to drug approvals

When the European Medicines Agency (EMA), which is headquartered in London, receives applications from drug makers seeking marketing approval for new treatments in Europe, it passes on the applications to national drug agencies.

Since the summer, and as a result of Brexit, the EMA has stopped all complicated drug approval processes in the UK. Instead a number of these applications are now being passed on to the Swedish Medical Products Agency which is to receive an extra SEK 10 million from the government so that it can recruit a number of experts.

Government plans to sue Danish state

The Swedish government is planning to sue the Danish state over a breach of the PostNord shareholder agreement, reports Dagens Nyheter.

There is a statutory requirement in Denmark that citizens must be able to receive digital post from the authorities. This has led to a 90% drop in letter deliveries in Denmark since 2000 and the Danish subsidiary of PostNord has seen revenues drop accordingly. With more than 3,000 employees entitled to three years’ severance pay in the event their jobs are axed, the carrier could be facing costs of SEK 6 billion. PostNord has asked the Danish and Swedish governments for a capital injection of SEK 3 billion, but Swedish Enterprise Minister Mikael Damberg has said “this is a Danish problem”. The lawsuit is seen as an attempt to force the Danes to back down

Banking union to the fore

Nordea’s plan to move its head office to Finland will be on the agenda when Pierre Moscovici, the European commissioner for economic and financial affairs, taxation and customs, visits Stockholm today. “There may be reason for reflection when one of your own banks moves to be inside the EU banking union,” Mr Moscovici tells Dagens Nyheter ahead of his visit.

With Sweden poised to launch an inquiry into the benefits and challenges of joining the banking union, the commissioner says “the door is always open, but no one is forced to join the euro”.

Alfa Laval exits Iran

Alfa Laval was one of many Swedish companies that tried to re-enter the Iranian market after the Joint Comprehensive Plan of Action (JCPoA) deal was struck in 2015, but the industrial company has now announced that it is scrapping plans to expand in Iran. “Doing business in a country such as Iran is not straightforward. The banks are a critical part of the equation; the financial transactions are not simple and require a lot of work,” says Peter Torstensson, vice president of communication at Alfa Laval.

One of the problems is that sanctions are making it impossible to carry out US-dollar transactions.

Deteriorating business climate in cities

The business climate in Sweden’s main cities has deteriorated sharply, according to the Confederation of Swedish Enterprise’s annual ranking.

In a survey of some 30,000 companies in the 290 municipalities, Stockholm has fallen to 123rd place, from 22nd place in 2014. Gothenburg ranks in 206th place, a new bottom score for the city, while Malmö, Uppsala, Linköping and Västerås have all hit their lowest rankings since the survey began in 2001.

Carola Lemne, head of the business federation, is concerned, given that the cities are engines of growth.

Johan Trouvé, CEO of Gothenburg’s Chamber of Commerce, believes the main problem is the attitude of the municipality’s bureaucrats. “They don’t understand the needs of the business world,” he says.

In Stockholm the problem is not just one of bureaucracy; a skills shortage, housing problems and inadequate infrastructure are other factors, according to Maria Rankka, CEO of the Stockholm Chamber of Commerce.

High-speed rail investment

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

Nordea aims to win over shareholders

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.