Division over defence spending


Defence Minister Peter Hultqvist
Defence Minister Peter Hultqvist

Defence Minister Peter Hultqvist (S) hopes cross-party agreement can be reached on defence appropriations for 2016-2020 by Thursday evening. The government has proposed raising the defence budget by a total of SKr 6.2 billion, which is less than the Moderates have proposed and just a third of the SKr 18 billion the Liberal Party has proposed.

“The Liberal Party believes this is what is required if our capabilities are not to be reduced further. There is a structural deficit that the Armed Forces have had to face since 2009,” said Liberal defence spokesman Allan Widman during a break in the negotiations on Monday evening.

The Armed Forces have said they require an annual boost of SKr 4 billion to meet the goals drawn up by the Defence Commission (Försvarsberedningen) – quite a bit more than the government has proposed. Furthermore, the Armed Forces would require an extra capital injection of SKr 15 billion in order to procure an additional submarine and expanding its Air Force, from 60 to 70 Gripen fighter jets.

Late yesterday Finance Minister Magdalena Andersson (S) said the government’s proposal was “balanced”. Afterwards, Moderate MP Hans Wallmark said: “The Finance Minister has been extremely frosty. Others in the government do not make it any easier for the Defence Minister”.

“Greece must be saved”

Anders Borg urges Greek bailout
Anders Borg urges Greek bailout

Talking to public service broadcaster SVT this morning, Anders Borg, the former finance minister, gave his views on the economic situation in Sweden and in Europe.

When asked about Greece, he made clear that the country needed to be saved so that it remained in the eurozone.

“My advice is that Europe should bail out Greece, even if the country has made a lot of mistakes,” he said.

He predicted that a new drachma would lose 40 per cent of its value relative to the euro if Greece were to withdraw from the monetary union (ed.), that banks would be forced to close for several weeks, restrictions would be imposed on withdrawals and anger would drive people out onto the streets to protest.

“It’s a small, fragile democracy. You cannot drive them into a tumultuous economic situation,” he said.

During the interview, Anders Borg said he expected European inflation and interest rates would remain low for a long time, and that this was a consequence of the ECB’s actions in combination with globalisation and an economic shift that affected consumer prices.

He also admitted that the Swedish government should have done more to stimulate the economy in 2012, when the Greek crisis struck. “We should have introduced some form of tax relief or invested more in the infrastructure,” he said.

Finland eyes Gripen

Sweden and Finland recently announced closer military cooperation, including the joint use of airbases, and on Wednesday the Swedish government granted Finland access to classified information regarding the Gripen NG fighter jet.

The backdrop is that Finland is to replace its fleet of F-18 Hornet fighter aircraft at an estimated cost of 6 billion euro.

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.

ID fraud soars

images-1The number of reported, suspected cases of perjury/forgery such as hijacking someone’s identity or using fake passports has surged from 350 in 2012 to 2,209 in 2014, show fresh figures from the Economic Crime Authority (SECA).
The trend is similar for accounting fraud and embezzlement, where the number of reported suspected cases, which totalled 2,705 in 2012, increased to 11,194 in 2014.
Eva Fröjelin, director general of SECA, describes the trend as a “brutal” awakening.

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.

Australia opens up for Swedish involvement

Sweden orders subsAustralian Labor leader Bill Shorten has called for Sweden to be involved in the tender process together with Germany, France and Japan to build the new fleet of submarines for the country. Prime Minister Tony Abbott initially excluded Sweden in the process to make proposals, citing its “lack of recent experience”.
Sweden’s submarine maker Saab Kockums, which last summer acquired its submarine business from German Thyssen Krupp last summer, has declined to comment the news.