Pressure on Damberg over brown coal

Pressure on Enterprise Minister Mikael Damberg is building over Vattenfall’s plans to sell off its German lignite operations. On Friday he received a petition with 65,000 signatures from environmental organisation, Greenpeace, demanding the state energy giant Vattenfall does not sell off its German lignite operations, but leaves the coal in the ground.

Damberg said, “The government only gets involved when there is a proposal. Germany decides German energy policy and the country wants to keep coal in its energy mix for a transitional period.”

The government is also under pressure from the Liberal Party, which wants to see a sale go through, but wants to have climate and environmental conditions attached.

Damberg did not wish to answer what action he will take if Vattenfall presents a sale proposition with no environmental conditions attached.

Audit Office warns government

The government may well be underestimating the difficulties of finding jobs for refugees, which in turn could hurt economic policy, warns the Swedish National Audit Office (Riksrevisionen) in a new report.

The Audit Office also notes that since 2002 Swedish governments have constantly postponed the time point at which the budget surplus target is to be achieved. Just two of the last 15 budgets have been restrictive. There should have been more, if governments were serious about attaining the target, find the authors of the report.

“A unique settlement”

VimpelCom’s settlement with the US and Dutch authorities last week to resolve charges of bribery in Uzbekistan has fuelled speculation that TeliaSonera, which is also under investigation, is about to reach a similar deal.

TeliaSonera CEO Johan Dennelind does not wish to comment, other than to say the settlement VimpelCom has reached is “unique” and that TeliaSonera has received much praise for the measures it has taken to right wrongs.

The CEO tells DI that the operator is spending a great deal of time and energy trying to find a “natural buyer” for its business in Uzbekistan, and that he expects the divestment of the Nepalese business to Malaysia’s Axiata to be completed by the end of June.

Ryanair CEO opposes plans

Sweden’s Green Party has long advocated a tax on airline tickets, suggesting a levy of SKr 110 for short-haul EU flights, and of SKr 270 for long-haul flights. The Social Democrats have been indifferent to the idea, but the government has in any case appointed a commission of inquiry, which in the autumn will suggest how to design such a tax.

Ryanair’s CEO Michael O’Leary has slammed the plans, which he describes as crazy. He says airline passengers will abandon Sweden as a tourist destination, if the Greens’ plans are realised: “You have good football teams and beautiful women, but otherwise there is no reason to come to Sweden,” he remarks.

Swedish companies exit Russia

A survey by ATL, a trade magazine for farmers, shows that Swedish listed companies have sold 154,000 hectares of arable land and 1.4 million hectares of forest in Russia in the past two years.

In 2014 Triton Agri sold 36,000 hectares of land in Penza and last year a decision was taken to divest some 80,000 hectares. Triton Agri has decided to invest in grain production in Ukraine instead. Asked by DI if the strategy has anything to do with political developments in Russia, a spokesman for the company who wishes to remain nameless says: “This is sensitive. Our business does not benefit from our talking about it”.

Black Earth Farming is also divesting land in Russia, but CFO Erik Danemar says the company has no plans to exit the country. Instead the aim is to ensure that the land holdings in Russia are as productive as possible.

Golden year for Volvo Cars

Volvo Cars has tripled profits to SKr 6.6 billion, readying the company to go out onto the bond market. For the second year in a row Volvo broke its sales record with over 503,000 cars sold, bringing earnings to over SKr 163 billion, 19% compared to the previous year.

The majority of operating profits came in during the first half of the year, around SKr 5 billion, due to volumes and also to Volvo selling many of the XC90 and XC60 models with high margins.

Proposed weapons rules threat to jobs

Thousands of jobs are under threat, Sweden’s security is on the line and the state will lose out on millions. Unions and businesses are critical of the proposal for new rules on Swedish weapons exports.

A parliamentary committee set up to review exports controls on military equipment (Kexkommittén) submitted a report last year suggesting Sweden ought to have a more restrictive policy of weapons export to non-democratic regimes.

BAE Systems Hägglunds warns exports will decline, companies will become less competitive and profitability will fall. It also warns that shrinking investment in research and development will hit universities and colleges. Saab shares this view, warning of fewer jobs.

Airbnb and Uber squeezing legislation

The sharing economy is growing fast, with companies such as Airbnb and Uber worth multi-million dollars.

The government has commissioned university lecturer, Karin Bradley, to chart the phenomenon and to reflect on its implications for legislation. She will also propose, if necessary, changes to legislation for consumer rights, product safety, inspections and how disputes could be resolved.

Minister for Financial Markets, Per Bolund, is positive about the sharing economy, which can increase sustainability, both environmentally and socially. He hopes the study will point out what barriers there are for development, and what the state can do to remove them.

Kamprad avoids billions in tax

As IKEA’s plans to expand in India take hold, French MEP, Eva Joly, and her colleagues have produced a report showing the furniture giant has avoided paying at least 1 billion euros, SKr 9.5 billion, in tax over the past six years. The European Commission is now to investigate IKEA’s set-up.

IKEA minimises its tax by moving money between different parts of the group and between different countries. The Commission recently introduced a proposal to tighten legislation on tax avoidance, but according to Eva Joly this will not fill all the loopholes. She says, “It is damaging for all of society. Remember the French Revolution started because the nobility did not pay tax. Today multinational companies and the rich manage to avoid tax and that is a reminder of the old French regime.”

IKEA points out that the company pays its taxes, “completely in accordance with national and international tax regulations”.

Charmed Modi

Swedish companies are investing big in India: Ikea is to open 25 new stores over ten years, Saab is hoping to negotiate orders for 100-400 fighter jets and Volvo is introducing its hybrid buses in Mumbai.

The Swedish delegation at the India International Trade Fair, Make, expected a two-minute visit from India’s Prime Minister, Narendra Modi, but Sweden’s trade secretary in India, Anna Liberg says, “We got 20 minutes with him, and he has shaken the hand of 10-15 Swedish CEOs and listened to their plans in India. We have made an extremely good impression.”

Volvo’s CEO, Martin Lundstedt, says, “I put forward our message on sustainability, urban development and public transport systems. And he displayed lots of interest in this, which, of course, means a lot to us.”