Government seeks clarification

Volkswagen has said it will recall 11 million emission-rigged vehicles worldwide. In a statement issued on Tuesday, the company said it was working on a technical solution to correct the manipulated software in the cars with EA 189 engines. In Sweden, 224,746 Volkswagen, Audi, Skoda and Seat vehicles will be recalled.

The government has called representatives of Volkswagen’s Swedish division to a meeting today to seek clarification on local vehicles.

Sweden may have to borrow more

In a new forecast for the Swedish economy, GDP will grow by 2.6% this year, and by 2.7% in 2016. However export-led growth has stagnated and productivity is something of a disappointment. Additionally, tax revenue is less than previously forecast. As a result, the government is revising down its forecast over public savings.

To date Finance Minister Magdalena Andersson has said that the government’s reforms will be financed “krona for krona”. However, uncertainty in the euro area could force Sweden to increase its borrowing. “But we are not there yet, since reactions have been muted despite the Greek drama,” said Andersson on Tuesday

Sweden must act constructively

At today’s Brussels summit leaders will discuss the UK’s calls for EU reform, note Moderate economic policy spokesman Ulf Kristersson and Moderate foreign policy spokeswoman Karin Enström in a DI debate piece this morning.

The number of EU citizens living in Britain has increased two-fold in the past decade, and PM David Cameron has proposed that EU immigrants will have to work in Britain for four years before they can claim benefits. The PM has also signalled that he will lead Britain out of the EU unless the proposal is accepted.

It is of vital interest to Sweden that Britain stays in the EU, which is why the Swedish government should now work to ensure that the British focus on important practical issues, instead of seeking treaty changes in the short-term. The Swedish government should also work to ensure that the right to freedom of movement in the EU does not undermine the right of all countries to design their own welfare policy, state the two Moderates.

Sweden lagging behind

In its latest Sustainable Economic Development Assessment (SEDA), the Boston Consulting Group (BCG) ranks Sweden in 5th place in a comparison of 149 countries. However, BCG finds that Sweden is lagging behind comparable countries such as Canada, Germany, Japan, South Korea, Switzerland and the US in terms of the infrastructure, education and economic stability.

“Economic stability should be taken with a pinch of salt. We’re talking about inflation expectations, but as far as the infrastructure goes, there is a big gap. And, as we are all aware, Sweden is lagging behind in education,” says Johan Öberg, MD of BCG Sweden.

Öberg is critical of government policy, saying no package has been presented to address the fundamental challenges regarding education and talent.

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.

Sweden keen to step up pressure on Putin

Swedish Prime Minister Stefan Löfven will land in Kiev later today for talks with Ukraine’s President Petro Poroshenko and Prime Minister Arseniy Yatseenyuk. He will also meet the leader of the Crimean Tatar community in order to highlight the fact that Sweden does not accept Russia’s annexation of Crimea.

During his day-long visit, Mr Löfven will sign a bilateral agreement to boost reform but much of the Swedish PM’s day will be spent discussing the situation in Eastern Ukraine and what EU member states can do to put pressure on Russia to establish a permanent ceasefire.

Mr Löfven will present the findings of his meeting in Kiev when EU heads of state and government meet next week to discuss Russia and Ukraine. Despite pressure from some members to ease or drop sanctions, the EU is currently united in its stance to maintain sanctions against Russia. Sweden’s stance is that the sanctions should remain in place as long as there are no tangible signs that the situation in Eastern Ukraine is improving. Sweden also believes that member states should be prepared to ratchet up pressure on Russia, with further sanctions.