EU warns of house prices

Sweden risks a disorderly housing market correction, warns the European Commission in its annual review of the Swedish economy, reports Reuters. The risk comes from persistent house price growth and that the policy implemented by Swedish authorities has not been sufficient.

The Commission wants to see housing tax reforms, steps to increase the rate of new housing construction and deregulation that leads to a more effective use of existing housing stocks. The Commission recommends gradually lowering the tax deductibility of mortgage interest payments.

Green light for Gazprom

Russian Gazprom says it now has the go-ahead to build the controversial gas pipeline Nord Stream 2.

Anna Kaisa Itkonen, the European Commission’s spokesperson on energy, says, “We do not like Nord Stream 2 from a political aspect. However, saying that, there are no legal grounds on which the Commission can oppose it.”

A new route to Europe has long been the goal of the Russian state gas company, something that has met widespread opposition. A new pipeline will enable Russia to bypass Ukraine and Eastern Europe, increasing its control over the countries. Martin Kragh, from the Swedish Institute for International Affairs, points out that Russia wants to cut Ukraine out of the European energy equation and tie up Europe as a long-term export market.

Nonetheless, Chloé Le Coq, doctoral student at Stockholm School of Economics, says there are positive factors, for example the opportunity to diversify transport routes for gas to Europe.