Paulsen takes over after Borg

The Dane Henrik Poulsen is taking over as deputy chair of the board in Kinnevik after former Finance Minister Anders Borg’s hasty exit. Henrik Poulsen is CEO of Dong Energy and is being pointed out as a future name within the Kinnevik sphere.

On Saturday Anders Borg left the investment company’s board after media attention concerning his behaviour at a party last weekend.

Dagens Industri (DI) also reports that Anders Borg is leaving another prestigious post – that of senior advisor at banker Citi. “We have come to this conclusion together. I believe it is the best for everybody in the current situation,” says Eirik Winter, CEO for Citi’s Nordic investment bank.

Several top names in firing line

Late on Thursday forestry company Holmen announced that the company’s chair and principle owner Fredrik Lundberg was under suspicion of bribery in connection with Holmen’s hunting trips. Early on Friday morning came the news that deputy chair of investment company Kinnevik and former Finance Minister, Anders Borg, was also under suspicion.

Hans Strandberg, Borg’s lawyer, says, “It concerns a hunting trip he took part in when he was no longer finance minister. However the prosecutor is linking the hunt to his duties as minister.” According to DI the National Anti-Corruption Unit is focusing its investigation on decisions affecting the forestry industry taking by the Ministry of Finance during Borg’s time in office.

Earlier media reports claimed that Anders Borg has paid around SKr 2,500 himself for each hunt, which is considered to be under the value of such a trip. On Friday Borg sent a text message to DI saying: “I am convinced that I have handled this correctly.”

DI reports that the prosecutor is planning to question a further three to six people who participated in the hunts.

Borg predicts housing price crash

It is no longer a question of if, but when Swedish house prices are going to crash, warns former Finance Minister Anders Borg. “I do not see how it can be avoided,” he said at DI Bank conference on Tuesday, claiming that Sweden’s debt and its housing shortage have exceeded levels that mean a future price fall is inevitable. In turn that will hit growth when indebted households cut down on consumption.

Anders Borg wants rent levels for new builds and existing rental properties to be reformed to stimulate the pace of construction, the possibility to build at height in urban areas and curb the potential for municipalities and neighbours to put a stop to planned construction.

In response Finance Minister Magdalena Andersson agreed that the price of rents is an important factor for the development of house prices and that rising household debt constitutes a clear macroeconomic risk. However she does not believe the house price fall is around the corner.

“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.