On Tuesday morning nine major owners of Swedbank were summoned to a meeting by the nomination committee to try and unite the ownership on the issue of Anders Sundström remaining as chairman in view of the AGM next week. However the meeting ended in an uprising as several institutions declared that they did not intend to support the re-election of Anders Sundström. To avoid a chaotic AGM the committee were forced to call Sundström and inform him that he had been fired.
According to information DI has, it is the handling of CEO Michael Wolf’s resignation and private property deals involving several directors, which is behind the action.
Anders Sundström says, “I ought to have started the process of recruiting a new CEO earlier. The other thing is that we ought to have understood earlier what Dagens Industri highlighted in these property deals.”
During election campaigns the Green Party set the goal of closing at least two nuclear power reactors during the mandate period. So far the closure of four of Sweden’s ten reactors has been announced. At the weekend the government announced the remaining six reactors will be phased out within 20 years. Lise Nordin, Green Party spokesperson on energy, considers the decision a major success.
However the alliance parties are critical. “They say they want to use the alliance’s energy agreement, but that is not true. It says nothing about phasing out nuclear power within 20 years as the government now wants, which is bad for both the environment and industry’s competitiveness,” says Maria Weimer, the Liberals energy spokesperson.
In the past three years state company Vattenfall has declared total losses of SKr 52 billion, mainly due to write-downs in the value of power plants, which have dramatically lost value owing to falling electricity prices.
A sensitivity analysis carried out by Vattenfall shows the threat of new write-downs is not over. Even slight falls in the price of electricity could trigger significant hits to the results. A future fall of 5% in the price of electricity with no change to the cost of fuel and emission rights would lead to a reduction in the value of fossil-based assets in Germany and the Netherlands of between 15 and 27%, the analysis shows.
Sweden is currently testing electrified roads in a real-life environment. In one trial, a rail that allows vehicles to collect current is being installed in the asphalt near Arlanda Airport, and in a second trial, on the outskirts of Gävle, an overhead conductive line that can be used to power trucks is being constructed.
The trials are at an early stage, but PostNord hopes that a commercial solution will be in place by mid-2017 which will allow the mail delivery company to drive electric trucks on the road between the Rosersberg terminal and Arlanda’s freight centre.
In addition to PostNord, Volvo, Scania, NCC and the Swedish Transport Administration (Trafikverket) are also involved in the trials. Current estimates indicate that it would cost around 120 billion kronor to electrify Sweden’s network of motorways and country roads.
Marcus Wallenberg, the chair of SEB, believes the authorities have gone too far in their regulation of the banks following the financial crisis, saying: “Everyone in banking realised that more stability was needed in the banking system, but the regulation has continued year after year”.
In a package of measures designed to curb the rising number of sick listings in Sweden, the government has proposed lowering the age limit for ill-health retirement from 30 to 19. Johan Forsell, the Moderates’ spokesperson on social insurance, is horrified by the proposal, saying it won’t put more people into work, or make them healthier.
There will always be those who are too ill to work, but it can never be a good thing to tell a 19 year old that they will be retired for life, he adds.
A report on the economic situation in the energy sector was brought before the energy commission yesterday. Declining profitability risks closing Swedish nuclear power, which represents 40% of the country’s energy, early, according to the industry. And industry organisation Swedenergy (Svensk energi) claims output tax makes up a quarter of all production costs.
Minister for Energy, Ibrahim Baylan (S), commented that all electricity production is struggling with low prices, and that taxes must be examined. Nuclear providers are facing major investment decisions, which must be taken before the middle of the year to meet tighter safety requirements after the Fukushima accident in Japan. Baylan has now promised the decision about output tax will be made by the middle of May.
Yesterday the Swedish Financial Supervisory Authority (Finansinspektionen, FI) decided to raise the lending buffer for banks to 2 percent from 19 March 2017. Chief economist from FI, Henrik Braconier, says the increase is because the authority sees lending growth continuing strongly in the Swedish economy, which means increased risks linked to the banking system.
However the banks are unhappy. Hans Lindberg, CEO for the Swedish Bankers’ Association (Bankföreningen) does not consider strong lending growth a problem. “The decision is unfortunate. Further capital requirements make it more expensive to lend money, which hold back growth and the creation of jobs in the Swedish economy,” says Lindberg.
Shortly after the criticised rise in taxes on biofuels the government is backing down and recommending a reduction. Finance Minister Magdalena Andersson says, “We want there to be good conditions for biofuels and propose that taxes are lowered as much and as quickly as possible.”
However as recently as December taxes were raised on several biofuels. In combination with falling petrol and diesel prices, sales of E85 and RME have fallen. Back then Magdalena Andersson said the government did not want to raise taxes because of EU regulations, something the Centre Party has pointed out was incorrect.
In response to why the taxes can be raised now, Magdalena Andersson says, “Biofuels may not be overcompensated in relation to the fossil fuels they replace. And the Swedish Energy Agency’s (Energimyndigheten) new report shows there are good margins for overcompensation.”
Writing in DI debate on Saturday, Innovation Minister Mikael Damberg (S), writes that the government is presenting its proposition for a new structure for state risk capital and state company financing. The government suggests launching a national development company, Fondinvest AB, which will be the hub for future state risk capital.
The government will also take the initiative in establishing a demonstration fund for developing renewable fuels, bio-based materials, networked products or to test new technology. Sweden’s future export successes need to be tested under real conditions before they can be launched on the market.
The proposition is intended to strengthen the ability for Swedish companies to create, grow and export with a base in Sweden.