End to Sweden’s crisis with Saudi Arabia

imagesAt a press conference on Saturday morning Foreign Minister Margot Wallström said that the government had sent its official emissary Björn von Sydow, the former (S) defence minister and Riksdag Speaker, to Saudi Arabia last Friday for talks with the Saudi government and King Salman. The government’s emissary had handed over two letters; one from Sweden’s King Carl XVI Gustaf and one from Prime Minister Stefan Löfven.
Immediately afterwards Saudi Arabia is said to have decided to normalise relations with Sweden.
A happy and relieved Margot Wallström told the press meeting that the Saudi ambassador to Stockholm would be returning as soon as possible, but her and Stefan Löfven’s response to journalists’ repeated question “Has Sweden has apologised?” appeared rehearsed:
“We’ve been able to sort out misunderstandings that we have criticised Islam or slighted the Saudi government,” was the reply both Wallström and Löfven gave.
At Saturday’s press meeting, neither Wallström nor von Sydow wished to comment on the content of the letters, but von Sydow said that it was evident in his talks with the Saudi authorities that the relations between the Swedish and Saudi monarchies are good.
Arab News reported on Sunday that “Sweden has apologised” for the “insulting statements by its foreign minister, and hoped for better relations between the two countries”.
On Sunday evening Wallström clarified on SVT’s Agenda programme that Sweden had not apologised, but that the government had via its emissary conveyed its regret over the breach in diplomatic relations between the two countries, and explained that Sweden had not wished to attack Islam or insult Saudi Arabia.
According to the Swedish foreign ministry (MFA), the issue of halted business visas for Swedish citizens in Saudi Arabia has still not been resolved, but the hope is that the situation will “return to normal”. Erik Wirkensjö, press officer at the MFA, was unable to confirm at the weekend whether the United Arab Emirates’ ambassador would also be returning, but said the MFA hoped and believed he would.

Government raises taxes

Finance Minister Magdalena Andersson and Financial Markets Minister Per Bolund called a press conference on Friday to say that the government intended to raise employer contributions for the under 25s. The government also proposed a hike of 0.44 kronor per litre on petrol tax and of 0.48 kronor on diesel, as well as an increase on the tax on nuclear power generation and on certain types of savings. A cut in the deduction on household services, RUT, and in the deduction on home renovations, ROT, will also be made.

As of 1 August, the government will start raising employer contributions for the under 25s – from 15% to 25%, which will generate an additional SKr 5.6 billion in revenue for the Treasury.

However, the main changes, which will bring an extra SKr 22 billion into the state coffers, will come into effect on 1 January 2016.

Magdalena Andersson is still keen to introduce a bank transaction tax but this is unlikely to come into effect before 2017, at the earliest.

Anna Kinberg Batra, the leader of the main opposition party, the Moderates, said on hearing the government’s plans: “Heavy tax hikes on households, transport and companies – how does that make Sweden stronger or create more jobs?”

Meanwhile, Erik Ullenhag, the Liberal Party spokesman on economic policy, accused the centre-left government of breaking one election promise after the other, thereby damaging its credibility on economic policy.

Supreme Commander on defence needs

Supreme Commander
Supreme Commander

Sweden must make up its mind about its level of defence, Supreme Commander Sverker Göranson has said from New York, where he will attend later today a conference on the challenges facing the UN’s peacekeeping forces.

With last autumn’s submarine hunt in the Stockholm archipelago in recent memory, MPs are currently discussing Sweden’s future defence needs. MPs will need to weigh up domestic defence requirements and the need to take part in peacekeeping missions overseas when drawing up a budget.

Asked how to resolve the problem, the Supreme Commander says jokingly: “There is a simple solution, all they have to do is inject more funds”.

He then goes on to say the government and the Riksdag must decide the level of defence Sweden should have – whether the country should choose to send a ship to take part in the operation off the coast of Somalia, or a unit to Mali, or whether the Armed Forces should have more of a presence in Sweden. If the situation in Sweden’s ‘near abroad’ deteriorates further, then the Armed Forces must be allowed to bring home key functions from overseas, he concludes.

“Reform creates jobs”

Löfven announces new strategy
Löfven announces new strategy

Sweden’s centre-left government yesterday unveiled its strategy to tackle the nation’s housing crisis, pledging the construction of up to 15,000 properties to rent annually.

Prime Minister Stefan Löfven has promised that the government will invest SKr 3.2 billion a year in the project, as of 2016. The reform will be financed through the lowering of the tax relief on home repair and maintenance – ROT – from 50 per cent to 30 per cent.

Prior to the general election last year Stefan Löfven promised he would leave ROT well alone. On Wednesday, the PM said that soaring ROT costs lay behind the U-turn. He also argued that the reform would create jobs.

“This means we will be able to build more new apartments and shift the emphasis from repairs to new construction. We have a housing shortage in 150 of Sweden’s 290 municipalities,” he said.

Ulf Kristersson, the Moderate Party’s spokesman on economic policy, is highly critical of the plans, saying it was a poor idea to re-introduce subsidies on the Swedish housing market and that it could pave the way for a black market.

Emil Källström, the Centre Party’s spokesman, has warned that the reform would in fact cause construction costs to soar. “We know that building subsidies end up in the pockets of the construction firms in the form of bigger profits,” he said.

Wallström in U-turn

SU27 fighter jets flew with transponders switched offSwedish military jets identified and tracked four Russian combat planes flying near Gotland and Bornholm on Tuesday morning. The aircraft – two TU22M bomber planes and two SU27 fighter jets – were flying in international airspace with their transponders switched off.

Defence Minister Peter Hultqvist said to the TT news agency that Russia had not violated international aviation rules, but added that Sweden had previously pointed out to Russia that this was inappropriate behaviour. “Flying without transponders in the way the Russians do is generally unsuitable,” he remarked.

Foreign Minister Margot Wallström first said it was unacceptable for Russian planes to be flying with their transponders shut off, calling it a violation of international aviation rules.

“We must have respect from Russia for the existing rules and regulations and an end to what has been incredibly challenging and downright dangerous for civil aviation. We are tired of always having to protest against this kind of … breach of rules.” she said.

However, later in the day Erik Boman, the Foreign Minister’s press secretary, called TT to clarify that Wallström and Hultqvist were in agreement. “Formally it is not a breach of rules, but it is inappropriate behaviour,” he said.

Meanwhile, the Swedish military said the threat against Sweden had not grown but that the Armed Forces were watching the “increased activity” in the region.

SU27 fighter jets flew with transponders switched off

Åkesson returns to politics

Åkesson returns to politics
Åkesson returns to politics

Jimmie Åkesson, the leader of the far-right Sweden Democrats, will return to politics in April after a five-month sick leave for burnout.

“My aim is to come back and start work after 31 March,” Åkesson said during the taping of a talk show to be aired on SVT on Friday evening. He also said that he would return to work in stages and would initially participate in “work training”.

Dagens Nyheter notes that it is uncertain as to whether Åkesson will be re-elected party leader at the party conference in November. Instead, Mattias Karlsson, who has acted as party leader during Åkesson’s absence, may well take over the role.

According to the newspaper’s sources, Åkesson, Karlsson and party secretary Richard Jomshof have drawn up a plan whereby Åkesson will speak in Visby on 1 July and hold his traditional summer speech on 29 August. After this, Åkesson will propose that Karlsson takes over the reins. However, this plan is now being questioned by a number of senior party members who have criticised Karlsson for trying to cooperate with the Swedish anti-racist Expo magazine, in order to uncover the extremists in the party.

“Highest respect for Islam”

Talking to the newspaper Dagens Nyheter on Saturday, Foreign Minister Margot Wallström said it was regrettable that the Swedish government took so long before deciding to cancel the military co-operation agreement with Saudi Arabia.

The political debate in Sweden about the deal began to heat up in January but it took 40 days of talks before the government announced it was terminating the agreement.

“A lot of other things happened and that also affected the debate. Things also happened in Saudi Arabia, which I believe influenced developments,” she told the paper.

On Friday, Wallström told parliament repeatedly that Sweden wanted to have a continued civil exchange with Saudi Arabia and claimed that the Swedish criticism of the way in which “the regime handles human rights must not be interpreted as an attack on Islam” and that “we have the highest respect for Islam as a religion and its contribution to our common civilisation”.

The minister also admitted she is worried that Sweden is now being portrayed inaccurately. “An incorrect claim is being made that we have attacked Islam as a world religion. We have very many Muslims in Sweden. We evaluate that we can have both an inter-cultural and inter-religious dialogue,” she said.

She also told MPs that the government was doing everything in its power to restore relations with Saudi Arabia.

Parties fail to impress electorate

Just one-third of voters believe the coalition government is doing a good job, according to the latest DN/IPSOS poll. The government’s approval rating is lower than that of the former Reinfeldt-government, and the electorate is unimpressed, says IPSOS manager David Ahlin.

He believes the low rating is explained by the weakness of the minority government, and by the fact that voters believe it is incompetent. “The government has had a shaky start with much focus on the fact that the Social Democrats and the Greens actually have different stances on a variety of issues”, he tells DN.

The alliance does not fare well in the poll either, with just 36 per cent saying they believe the centre-right parties would do a better job than the government.

“Many voters are cautious . Many questions are unanswered right now. The government has not yet managed to pass a budget through parliament and it is unclear what path the alliance will tread in the future,” comments Ahlin.

Vattenfall close to striking deal

Damberg: Any deal must be commercially sound

Sweden’s state-owned Vattenfall said in January this year that the utility would be run as six business areas from April 1, and that lignite power would be left outside this reorganisation (ed.).

Today Danske Bank analyst Jacob Magnussen tells business daily Dagens Industri  he believes the exclusion of lignite power from the reorganisation indicates that Vattenfall has come a long way in the process to sell its lignite power plants and coal mines in Germany.

Two Czech power giants, EPH and CEZ, have expressed interest in the business on a number of occasions in the past six months, and recently Poland’s PGE has eyed Vattenfall’s German assets. A price tag of between SKr 20 and 40 billion has been mentioned.

Simultaneousy, Germany’s RWE and E.On are pressing ahead with the sale of their lignite businesses.

Just how the government will react, if an offer is made, is unclear. The Green Party has called for the closure of the lignite mines, while Prime Minister Stefan Löfven has promised that the utility will not strike any more bad deals, such as the one with Nuon.

Meanwhile, during parliamentary question time on Thursday, Enterprise Minister Mikael Damberg said he would not take any stance until a bid has been made. Talking to DI afterwards, the minister said that any deal struck would have to be commercially sound.