Exceptionally expansionary monetary policy and the refugee influx are fuelling the Swedish economy but concealing weak underlying growth potential, according to Mats Kinnwall, chief economist at the Swedish Association of Industrial Employers (Industriarbetsgivarna).
Kinnwall, who is also chief economist at the Swedish Forest Industries Federation (Skogsindustrierna), says low interest rates have fuelled investment into property but other forms of investment are necessary in order to raise growth potential.
“We need a new internet, we need a regime shift,” he adds, noting that global productivity growth is weak
Nordic operator Telia Company has divested its entire holding in Russia’s Megafon to Gazprombank for around SEK 8.6 billion. The transaction is in line with the company’s strategy to focus on the Nordics and the Baltics. The intention is to use the funds to make acquisitions on the operator’s home markets.
According to the latest data from Statistics Sweden and the Swedish National Mediation Office, average earnings have grown by 2.6% year-on-year. Government-targeted staff nurse and teacher pay rises have contributed to the growth in average earnings, but analysts are also seeing signs of rising overall wage pressure.
The Swedish Association of Local Authorities and Regions (SALAR) has set ambitious targets to clamp down on staffing agency costs in the health service. Despite this, costs continue to soar. In 2016, locum staff cost the authorities SEK 4.6 billion, an increase of SEK 2 billion on 2011.
A rise in the retirement rate, combined with a growing need for care and a tougher working environment, has left the health service struggling to find staff. “Many of our members have found themselves in a situation where they have had no other option but to hire agency staff,” SALAR head Hans Karlsson says.
The UK is one of Sweden’s largest trade partners and if Britain were to leave the EU without a trade deal, Sweden would be badly hit. In the absence of a deal, the UK would be required to follow World Trade Organisation rules on tariffs, making future trade more expensive.
On Thursday the Swedish government therefore ordered the National Board of Trade (Kommerskollegium) to prepare Sweden’s priorities ahead of Brexit trade talks.
Both Brussels and London have been talking of a “no deal” Brexit recently but Social Democratic EU Affairs and Trade Minister Ann Linde says Sweden has not given up hope of an agreement.
The Christian Democrats (CD) have joined forces with the Moderates, calling for change in the Employment Protection Act (LAS). Talking to Dagens Industri (DI), party leader Ebba Busch Thor says: “It is obvious that there needs to be a major reform of LAS, which as it stands is doing more harm than good”.
Alliance cooperation has intensified since Ulf Kristersson was elected the new Moderate leader, and ventures to provide the electorate with a credible government alternative are increasing, she tells the newspaper.
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.
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.
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”.
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.