Default would wipe out ECB’s equity

We do not yet know how the Greek drama will end. One possible scenario is that the EU/ECB/IMF troika will extend Greece’s bailout programme at the last moment. Such a move is feasible, since Greece is in quite a strong negotiating position, writes Professor Mats Persson at Stockholm University’s Institute for International Economic Studies.

In a debate piece in Dagens Industri, the professor makes the point that 75% of Greece’s debt is owned by the troika, and thereby indirectly by taxpayers. If the programme is not extended, and Greece goes bankrupt, the troika will be forced to report massive capital losses. The losses would be so great that the ECB’s equity would be wiped out.

Minister on defence needs

With tensions running high in the Baltic and Nordic regions, Sweden cannot transfer surplus defence equipment to other countries in the same way as it has done in the past, Defence Minister Peter Hultqvist has told business daily Dagens Industri (DI).

“I am not prepared to jeopardise Sweden’s needs or its defence capability in any way,” he said.

The minister, who was recently in India to discuss the country’s interest in the Gripen fighter jet, has also told the paper that the Swedish government is prepared to support Saab, and to reach government to government agreements with India.

Legal battle expected

Last August Eniro dismissed CEO Johan Lindgren after the directories firm unearthed inaccuracies in its accounts, which forced it to cut its profit forecast. The firm, which has seen its market value fall sharply in the past year, called in the police last September.

The police investigation into Lindgren is ongoing, but DI today reveals that the fired CEO sent emails to subordinates ordering them to inflate earnings. In one email that Eniro has handed over to the police, Lindgren apparently wrote: “Follow my instructions, or I will kill you”.

Meanwhile, Lindgren and his lawyers are suing Eniro for cancelling an agreed severance package. In turn, Eniro is arguing that the cancellation was in order, and is claiming damages of the former CEO.

Sweden must act constructively

At today’s Brussels summit leaders will discuss the UK’s calls for EU reform, note Moderate economic policy spokesman Ulf Kristersson and Moderate foreign policy spokeswoman Karin Enström in a DI debate piece this morning.

The number of EU citizens living in Britain has increased two-fold in the past decade, and PM David Cameron has proposed that EU immigrants will have to work in Britain for four years before they can claim benefits. The PM has also signalled that he will lead Britain out of the EU unless the proposal is accepted.

It is of vital interest to Sweden that Britain stays in the EU, which is why the Swedish government should now work to ensure that the British focus on important practical issues, instead of seeking treaty changes in the short-term. The Swedish government should also work to ensure that the right to freedom of movement in the EU does not undermine the right of all countries to design their own welfare policy, state the two Moderates.

E.On seeks early closure of reactors

Germany’s E.On, which owns 54.5% of nuclear power plant operator OKG, announced yesterday that low electricity prices and high maintenance costs associated with the Oskarshamn reactors 1 and 2 meant that it was seeking to close both units. Minority owner Fortum opposes the decision.

The news, which comes just two months after Swedish state-owned utility Vattenfall said it was seeking the early closure of the Ringhals 1 and 2 reactors, could leave Sweden with just six reactors.

Sweden’s centre-left government has increased taxes on nuclear power capacity since it came to power, from 6 to 7 öre per kilowatt-hour. It has been estimated that OKG will pay SKr 1 billion annually in capacity tax, revenue that the Treasury can no longer count on.

Commenting the news, Ibrahim Baylan, the energy minister, says it is vital that cross-party agreement is reached on a long-term solution.

Meanwhile, the Moderates have requested that Baylan be summoned to appear before the parliamentary commission on the constitution.

“In recent months we have received news that four reactors will close. Obviously this will have a major impact on businesses and jobs,” says Lars Hjälmared, the Moderate spokesman on energy policy.

Citigroup CEO expects solution to be found

Visiting Stockholm on Monday, Citigroup CEO Michael Corbat told business daily Dagens Industri he believes Greece will stay in the euro zone; a Greek exit would undermine confidence in the single currency.

And, commenting Britain’s planned EU referendum, Mr Corbat says he does not believe in an exit, pointing out that Britain is an important trading partner for the rest of Europe.

Imports hurting recycling industry

In 2014 Sweden imported 2.34 million tonnes of waste, some 90% of which was burnt according to preliminary figures from the Swedish Environmental Protection Agency (Naturvårdsverket). This is a billion-kronor industry for the Swedish waste incineration plants, but the business has its critics too.

“We already burn far too much, and much of what we burn could be recycled instead. And still we continue to build new plants. It is quite remarkable,” says Britt Sahleström, head of the Swedish Recycling Industries’ Association (Återvinningsindustrierna).

Hunt for new Nordea CEO

A press conference held by the Swedish Financial Supervisory Authority last month turned into something of a nightmare for Nordea and CEO Christian Clausen. For the third time within five years the bank received scathing criticism for its inability, negligence and bad practices when dealing with money laundering.

Svenska Dabladet suggests that the bank’s lax anti-money laundering controls have damaged Christian Clausen’s reputation and that this is why the bank is now reportedly hunting for a new CEO. According to Denmark’s daily newspaper Berlingske, Mikael Rasmussen, CEO of Danish Nykredit, and Torbjörn Magnusson, CEO of insurer IF, are prospective candidates for the post.

Greenpeace slams SSAB

After buying rival Rautaruukki last year, Swedish steelmaker SSAB has become a stakeholder in Fennovoima, which has plans to build a nuclear plant in the Finnish village of Pyhäjoki.

The Swedish arm of environmental organisation Greenpeace is highly critical of SSAB’s involvement in the much-disputed project, saying: “It is deeply alarming that SSAB is funding the construction of a Russian nuclear power plant just 150 kilometres from the Swedish border, given the huge environmental and financial risks associated with the project”.

In a move designed to persuade SSAB to quit the project, Greenpeace representatives will today meet with the steelmaker’s executives. However, while SSAB says it welcomes a discussion, it has no plans to withdraw from the venture.

IT sector growth

Swedish Spotify, which continues to post heavy losses, is valued at SKr 68 billion. In the United States, firms such as Snapchat and Uber are said to be worth billions. The trend has caused many to draw parallels to the time before the dotcom crash in 2000.

Skype founder Niklas Zennström warns that the valuations on many technology companies are dangerously high and there is a risk of a downward revision. Simultaneously, he stresses that the underlying growth in the sector is strong.

“There are individual companies you could have a discussion about. But e-trade, digital advertising and appstores are real industries today. There is substance in the sector, which there was not in 1999,” says Zennström.