Anger over EU plans against tax fraud

On Thursday the EU Tax Commissioner Pierre Moscovici presented the European Commission’s proposals to clamp down on tax fraud and corporate tax avoidance schemes, which he estimated costs the EU upwards of SKr 650 billion (70 million euros) per year.

Sweden’s Finance Minister Magdalena Andersson welcomes the proposal, while Krister Andersson, the Confederation of Swedish Enterprise’s tax policy chief, says the proposal goes too far, and warns that the proposals will entail higher tax for Swedish companies at the same time as tax revenue for the state will decrease.

“Swedish firms risk paying more since Sweden has a lower corporation tax than Germany, France and India. At the same time Swedish tax revenue will fall,” he warns.

Optimism among firms

The National Institute of Economic Research (NIER) published its economic tendency survey on Tuesday. The indicator climbed 1.6 points from 110.3 in December to 111.9 in January, with the manufacturing indicator rising sharply from 115.1 to 120.8.

Swedish firms continue to be confident about the economy. Consumers are more pessimistic than usual about the economy, but are more upbeat about their personal finances.

According to Nordea, the economic tendency indicator is at its highest in over five years, and on a par with a 6% rate of growth in the economy. However, Mats Dillon, head of NIER, says the strong manufacturing indicator, which pulled up the overall indicator, should be taken with a “pinch of salt”.

New probe into Gripen deal

Brazilian prosecutors have launched a new probe into suspected payment of bribes concerning Brazil’s purchase of 36 JAS Gripen planes from Saab.

According to the Brazilian paper O Estado de Sao Paolo, the probe is part of a bigger investigation into the suspected illegal payment of around SKr 5.2 million by the jailed lobbyist Mauro Marcondes Machado to a company owned by the son of former Brazilian President Lula da Silva. The paper writes ”documents found at the home of the lobbyist state that Saab asked Lula to endorse support for the Saab deal with President Dilma Rousseff”.

Companies have no contingency plans

Sweden’s electricity supply will be less secure, if operators are forced to close the nation’s remaining reactors early, warns the Confederation of Swedish Enterprise (Svenskt näringsliv).

The Confederation finds that a majority of the 2,700 companies it has polled have no contingency planning for lengthy power outages, and many would find it hard to make up for higher electricity prices.

Higher unemployment forecast

Sweden may well have to live with an unemployment rate of over 7 percent in the longer term, warns the Swedish Public Employment Service (Arbetsförmedlingen). Describing the government’s unemployment goal as unrealistic, the agency says unemployment will fall in the next two years but then rise again as a result of immigration

Liberals warn the government

DI reported yesterday that research is under threat from nuclear power plant closures, as scientists leave Sweden.

Liberal party leader Jan Björklund has reacted angrily, “In practice the government is reintroducing the “thought-ban” laws (Act from 1986 prohibiting construction of nuclear power stations – ed.) by strangling funding.”

Björklund wants to construct a new research reactor to study the fourth generation of nuclear power energy. Both the Moderates and Vattenfall’s CEO Magnus Hall are in agreement.

However the government dismisses the criticism. “We aim to be an eminent research nation, but it is not the government that controls in detail which research should be financed,” says Research Minister Helene Hellmark Knutsson (S). (DI: 11)

Swedish companies digitally weak

A study carried out by Fujitsu, and presented at Davos, shows that Swedish companies are lagging behind in terms of digitalisation. The report shows 52 percent of the 153 Swedish decision-makers who took part in the study consider the digital strategy in their company to be unclear and confusing. “We have infrastructure and networks that make it possible to work digitally but we do not have the knowledge to benefit from the technology,” says Karin Scheil Jonsson, MD of Fujitsu Sweden.

One explanation could be that there has been less demand from consumers in Sweden, compared to, for example, Germany. Another reason is uncertainty about who has control over digital projects.

Jacob Wallenberg, chair of Investor, says, “It is clear that we, on the board, must spend more time working on this than we have done previously.”

Riksbank should have new inflation target

Professor Marvin Goodfriend from Carnegie Mellon University and Mervyn King, former government of the Bank of England, who reviewed the Riksbank’s performance 2010-2014, have suggested the Swedish central bank ought to be able to take longer than two years to reach the inflation target of 2 percent, as long as they give sufficient reason.

Mervyn King says that confidence is built on honesty, “There is no point pretending that the world has not changed. The Riksbank ought to be able to say ‘Right now we cannot achieve the target within two years without destabilising the economy’”.

They criticised the bank for overly optimistic forecasts, as well as for a mechanical trust that monetary policy and fine-tuning of interest rates would achieve inflation targets.

Poland’s policies concern Skanska

Skanska employs 7,750 people in Poland, with sales in the country accounting for 7 percent of the builder’s total turnover.

Executive vice president Roman Wieczorek is now concerned about political developments, since national-conservative party Law and Justice came to power in 2015. Measures such as appointing its own members to the Constitutional Court and new legislation allowing the government to appoint and dismiss key public service roles have put Poland on a collision course with the EU and the European Commission has launched an inquiry.

“Many of the changes are leading to greater polarisation in society, which is not good. It could create instability in the future,” says Roman Wieczorek. He thinks there is a risk that economic support from the EU may be reduced.

New agreement boosts exports

On Saturday the International Atomic Energy Agency (IAEA) announced that Iran had taken all measures to comply with the deal to scale down its nuclear energy programme. As a result the UN, the EU and the USA have lifted many of their sanctions.

For Sweden this could mean more exports. Mikael Damberg, Minister for Enterprise and Innovation, who was recently in Teheran with a delegation of Swedish businesses, says, “Iran was previously the second largest export market in the Middle East. But when sanctions were introduced Swedish exports plummeted… Iran is behind with investment in telecommunication, infrastructure, mining and the vehicle and transport sector, which are many of the industries in which Sweden excels.”

Cherif Sayed, Business Sweden’s Head of the Middle East and Africa, says that the annual exports could well increase sixfold compared to the current level of around SKr 2 billion.