Persson on way out

Olof Persson succeeded Leif Johansson as chief executive of AB Volvo, Sweden’s largest industrial group, in 2011. Shortly after his appointment, Persson announced his intention to improve the group’s operating margin, which in 2011 was 8.7%. Instead, however, the operating margin has shrunk and Volvo shares have underperformed.

Dagens Industri now suggests that the Volvo board is planning to recruit a new chief executive and that Persson will be forced to step down within the next few weeks.

Greens under pressure over lignite mines

imagesIn the run up to last September’s general election, the Green Party said one of the first measures of a centre-left coalition government would be to stop Vattenfall from enlarging its lignite mines in Germany. Six months on, it’s business as usual at Vattenfall. Even if the Social Democrats and the Green Party have agreed that the state-owned utility must cut its carbon emissions, no new directives have been issued to halt the expansion plans.

So, what does the government intend to do? While the Green Party has called for the closure of the German coal operations, the Social Democrats have welcomed Vattenfall’s plans to divest the German coal business.

Moderate MP Lars Hjälmered is now demanding clarity from the government as to what it intends to do with the German business.

New submarines ordered

Sweden orders subs

Defence Minister Peter Hultqvist has told public service broadcaster SVT that the government will be placing an SKr 8.2 billion order for two new submarines from Saab Kockums. The minister announced the news while visiting the Karlskrona shipyard on Tuesday, although a formal decision will not be made until Thursday. The submarines will be delivered in 2022.

Government invites leaders to meeting

images-1Following Sweden’s cancellation of the defence co-operation agreement with Saudi Arabia, Foreign Minister Margot Wallström and Enterprise Minister Mikael Damberg have invited some 40 business leaders to a meeting on Thursday to discuss how export companies can develop their business in the Gulf States.

Dagens Industri (DI) reported last week the diplomatic row has meant that a number of companies have seen contracts being terminated. However, Swedish industrial group Sandvik has not been affected, according to chief executive Olof Faxander, who have been invited to the meeting, but who is unable to attend. He says to the business daily: “We believe that trade, openness and a presence in many countries around the world leads to economic development and improves conditions in those countries”. He expects Swedish firms will continue to develop their businesses in the region, which offers significant opportunities for growth.

Peace movement on the warpath

Thailand purchases military equipment from Sweden

The Swedish Peace and Arbitration Society (SPAS) has welcomed the Swedish government’s decision to cancel the defence deal with Saudi Arabia and is now calling on the government to scrap other agreements, such as the one Sweden has with Thailand. The co-operation agreement is linked to Saab’s sale of an integrated air defence system with Gripen fighter jets and the Erieye radar reconnaissance system.

Following the military coup last year, Thailand’s PM, General Prayuth Chan-ocha has promised elections will be held but Human Rights Watch recently noted that the country is descending deeper into dictatorial rule. And, for officials at the Swedish Ministry of Defence, the situation in Thailand is problematic.

“We are preparing the question, on what form of co-operation we should have,” a ministry spokesman says.

Sweden currently has military co-operation agreements with 32 countries.

Saab hopes to sell to Bulgaria

imagesDefence and security group Saab is currently developing the next generation of the JAS 39E/F fighter jet; the first of the 60 new JAS Gripen 39E fighters will be delivered to the Swedish Air Force in 2019, the same year that Brazil will take delivery of the first of the 36 JAS 39E/F fighters it has ordered.

At the same time as the first test plane is being assembled in Linköping, Saab is also trying to find buyers for its current version of the fighter, the JAS Gripen C/D, which is currently flown by the Swedish, Czech and Hungarian air forces, among others.

Jerker Ahlqvist, head of business unit Gripen, says the group wants to exploit its strong standing in central Europe as a number of countries aim to replace their outdated Russian planes. Saab is in talks with Slovakia (where a decision is expected some time this year), and Bulgaria has expressed interest.

Ulf Nilsson, head of business area Aeronautics, believes Bulgaria is looking at 14-15 fighter jets and that Lockheed Martin with its F-35 will be the defence and security group’s main competitor in years to come.

Reactions to diplomatic snub

karin enströmSaudi Arabia’s snub has stirred a reaction from Swedish MPs with Karin Enström, the Moderate Party spokeswoman on foreign policy, placing some of the blame on the Swedish government.

“It’s a serious matter if Sweden’s voice is stopped or weakened. There is a risk of relations getting burned with countries in the region. First of all Margot Wallström was not welcome in Israel and now her speech has been blocked,” Enström said to TT.

Prime Minister Stefan Löfven did not wish to comment on Monday, but it is quite clear that Saudi Arabia’s move came as a shock, according to Ulf Bjereld, a professor at the University of Gothenburg.

Valter Mutt, the Green Party spokesman on foreign policy, believes Saudi Arabia’s decision to block Ms Wallström’s speech is “the final nail in the coffin” for the agreement.

The Green Party, the Left Party and the Christian Democrats are all keen for the deal to be torn up, while the Liberal Party is calling for a decision to be taken at Thursday’s Cabinet meeting.

“There is absolutely no reason left to sell arms to such a country. I believe we should seize the opportunity now that this has happened. We might as well cancel the deal straightaway,” Liberal MP Maria Weimer has said.

Click to read articles in Dagens Nyheter and Svenska Dagbladet.


Saudi Arabia recalls ambassador as row deepens

sauditoppSaudi Arabia has recalled its ambassador from Sweden as the diplomatic dispute between the two countries grows. The news emerged a day after Sweden tore up the decade-long arms agreement with Saudi Arabia.

Officially Sweden has said that the Saudi ambassador was summoned to the Ministry for Foreign Affairs (MFA) on Tuesday where he was informed that the agreement would be cancelled.

However, Svenska Dagbladet (SvD) reports this morning that the Saudis had received advance information ahead of the Arab League meeting in Cairo that Sweden intended to tear up the agreement. The MFA had apparently told the Swedish Embassy in Riyadh to pass along the news to the Saudi government.

The newspaper has not been able to receive confirmation as to when the meeting took place, or the Saudis’ reaction to the news.

The paper also reports that the Saudis has already informed Sweden that their ambassador was being recalled.

“We took the opportunity to express the hope that the ambassador would soon return and stressed Sweden’s interest in having good relations with Saudi Arabia,” Erik Boman, Margot Wallström’s press secretary tells the TT news agency.

Left Party sent funds to pro-Russian separatists

According to the tabloid Aftonbladet, the Left Party’s international forum, VIF, has sent several hundred thousand kronor in development aid to the Ukrainian Borotba organisation, which is said to have links to Russian President Vladimir Putin.

The exact sum is uncertain, but it is known that between 2010 and 2012 a total of SKr 219,000 was channelled to the Organisation of Marxists and Borotba, which was formed in 2011 by former members of the aforesaid Organisation.

VIF describes Borotba as a left-wing movement opposed to neo-Nazism and or feminism, but according to Jakob Hedenskog, a security policy analyst at FOI, the defence research agency, Borotba is “a pawn in President Putin’s power game”. The organisation is coloured by Soviet nostalgia and separatism, Hedenskog says.

“As an active part of the anti-Maidan movement, they are in practice on the same side as the pro-Russian separatists in the Donbass. The long-term aim is to divide Europe,” he tells Aftonbladet.

The tabloid also reports that SKr 250,000 was paid directly from VIF to a bank account belonging to one of the Borotba leader’s girlfriends. This goes against Swedish regulations; recipients of aid must be classed as organisations. After the irregularities were discovered, SKr 128,000 has been paid back to VIF. The last payment was made in 2012.

Ann-Margrethe Livh, VIF chair, stresses that the organisation has ceased its co-operation with Borotba. According to her, Borotba’s main goal during the years of co-operation was the fight against the neo-Nazi Svoboda group.

“They were young people who were not at all warlike, but renounced violence. I do not know what happened after 2011-2012, when we ended the co-operation. If someone has flipped out or things have gone wrong, I can only express regret,” she says.

Left MP Hans Linde is critical, saying this is an unacceptable attitude. “We defend Ukraine’s territorial integrity. If Borotba takes this type of stance then it underlines how important it is that we no longer co-operate with them,” he says.

Sweden ends co-operation deal with Saudi Arabia

Peter Hultqvist, the defence minister, said late Tuesday evening that Sweden was cancelling the decade-long military co-operation agreement with Saudi Arabia because “in practice, the military co-operation is not ongoing”. Saudi Arabia’s ambassador to Sweden had been informed of the decision on Tuesday morning.

The agreement has been subject of intense debate in Sweden in recent weeks with the Green Party, the junior party in the coalition government, wanting to wind it up.

Åsa Romson, deputy prime minister and member of the Green Party, said on hearing the news: “This is a win for a clear foreign policy based on respect for human rights and a moral compass where this type of far-reaching military co-operation agreement simply does not fit”.

The announcement came just after Saudi Arabia had blocked Margot Wallström, the Swedish foreign minister, from speaking about human rights and democracy to a summit of Arab leaders in Cairo. She had also condemned the sentencing of Saudi blogger Raef Badawi to a “medieval” punishment of 1,000 lashes (ed.). On Monday evening, Arab League foreign ministers expressed condemnation and astonishment at Wallström’s remarks, which were incompatible with the fact that “the constitution of the Kingdom of Saudi Arabia is based on tolerant Sharia law that has guaranteed human right and preserved people’s lives, possessions, honour and dignity”.

Peter Hultqvist has told Dagens Nyheter (DN) that the events of the past two days have not influenced the government in its decision to cancel the agreement. Asked to assess the possibility of signing new civil contracts with Saudi Arabia after what has happened, he said: “The Ministry of Enterprise and the Ministry for Foreign Affairs have responsibility for these matters. The government has presented to the Saudi ambassador that we want to proceed with the civil partnerships and develop them”. He then added: “As I understand, the foreign minister is prepared to visit Saudi Arabia despite what happened at the Arab League meeting”.

The European Commission said Tuesday it would be taking measures after Margot Wallström’s speech was blocked.