​Doubts about Patriot

The Swedish Armed Forces’ main argument for the purchase of Patriot is that the air defence system protects Sweden against ballistic missiles.

However this week the New York Times published an article in which the Patriot’s capacity against ballistic missiles was put in doubt. On 4 November Houthi rebels in Yemen fired a Burqan 2 missile towards the capital of Saudi Arabia. As it flew towards Riyadh it was met by four Patriot missiles. Debris was strewn across the centre of the city and the official version is that the debris proves the missile was shot down.

However missile experts who have analysed pictures and film say the missile detonated close to the terminal building at Riyadh’s airport.

Only three days after the attack, Sweden’s government decided to choose the Patriot system and instructed the Swedish Defence Materiel Administration (FMV) to begin negotiations with the US.

Dagens Industri (DI) reports that its sources have said the Armed Forces can afford to buy 60-70 missiles for the Patriot system, and only a few of the advanced PAC-3 MSE, which cost SEK 50 million each. Last week DI reported that France and Eurosam quoted EUR 850 million for a package with SAMP/T, which covers Sweden’s entire air defence needs.

Government’s capital requirements threat to pensions

The government wants to go further than the EU when it comes to capital requirements for some occupational pension insurance plans. This could worsen the returns, by up to 20 per cent, for those who choose safer alternatives with guaranteed returns, write Anna Falck from the Swedish Agency for Government Employers (Arbetsgivarverket), Lena Emanuelsson chair of Saco-S, Swedish Confederation of Professional Associations, Åsa Erba-Stenhammar head of negotiations at the Public Employees’ Negotiation Council (OFR) and Helen Thornberg from the Swedish Union for Service and Communications Employees (Seko).

The EU’s occupational pension directive is to be implemented in Swedish law. The four welcome that the government is going to introduce an independent regulation for service pension companies. However, they believe it is difficult to motivate going further than other countries.

They want the rules to be formed so that the current traffic light system remains at the same level. Occupational pensions are not only essential for individual pensioners but also for society and the creation of capital in society through long-term saving.

New amortisation requirement

In light of concerns around household debt levels, Financial Markets Minister Per Bolund announced on Thursday that tougher amortisation requirements will be introduced for homeowners as of 1 March 2018. All new mortgage holders who borrow more than 4.5 times their gross income will have to amortise at least 1% of the debt, in addition to the existing requirement.

The new requirement will have the most impact in Stockholm and Gothenburg, where property prices are highest. In Stockholm, 30% of all new mortgage holders will be affected.

Elisabeth Svantesson, the Moderate spokesperson on economic policy, is critical, pointing out that house prices are already falling and that such a measure could lead to a further drop in prices. She calls for major reform of the housing market instead.

Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce, believes the new requirement will do more harm than good and curb growth in the region.

Minister threatens to toughen up law

Finance Minister Magdalena Andersson has turned on the financial elite who shop around the world in search of the lowest taxes and is prepared to toughen legislation.

“It is completely unacceptable that people spend so much … time and energy to avoid paying tax,” she says. However, “The problem is that if you are really going to make it difficult to tax plan then you need to go outside the EU and introduce capital restrictions. When companies actively exploit the possibilities, it means tougher legislation makes it more difficult for everyone who runs a company.”

Forecast: government misses target

The government’s budget is putting pressure on state finances and is leading to surplus targets being missed, says the Swedish National Financial Management Authority (ESV).

According to ESV, the surplus in the public sector’s financial savings will fall from 0.9% this year to 0.6% next year as a result of the government’s budget bill, which is expected to reduce tax revenue and increase expenditure. This means the government will not achieve the surplus target of 1% over a business cycle.

Trade deficit between Sweden and US

Via Skype, US Secretary of Commerce Wilbur Ross participated in a lunch with the Swedish-American Chamber of Commerce in New York on Tuesday. The US is Sweden’s most important trade partner outside the EU, and Wilbur Ross says he is prepared to resume the paused TTIP negotiations.

Sweden’s Minister for Enterprise Mikael Damberg also participated in the lunch and will meet Wilbur Ross today, Thursday. He does not share Wilbur Ross’s views of TTIP but says, “even if we have different views, it is important for us in the government to develop a relationship with this American administration”.

Wilbur Ross points out the major trade deficit – last year Sweden sold SEK 87 billion worth of goods and services to the US but imported only SEK 37 billion worth – although says, “We share many of our values with Sweden and have huge respect for the technical knowledge in the country.”

Next recession will hit foreign-born

In a report based on new data from Statistics Sweden, which is presented today, the Liberals have looked at how the next recession will affect the most vulnerable on the Swedish labour market.

Writing in Dagens Industri (DI), economic spokesperson for the Liberals, Mats Persson, states that those who are currently unemployed come from two main groups: people born outside of Sweden and those who do not have an upper-secondary school education. The situation is particularly serious for foreign-born women; almost 30 per cent of women born outside of Europe of working age have no job.

The new report shows that in the past three recessions in Sweden since 1990, the employment rate among both groups has fallen by nine percentage points, which is around 250,000 people. Mats Persson writes, “A labour market that does not work for these groups during an economic boom is a labour market that knocks out many during a recession.” Political courage is needed to push through reforms for a labour market on which everyone is necessary.

Government proposes higher pension age

Minister for Health and Social Affairs Annika Strandhäll (S) is aiming to table a proposition to raise the pension age next year. “I am not ruling out a proposal before the coming election,” says Annika Strandhäll.

The changes being discussed include raising the earliest pension age from 61 to 63. Additionally, employers will not be able to give someone notice before 69 years of age.

India wants Sweden’s help to grow

For the first time India’s government is arranging the business seminar, Make in India, outside of India, and it will take place in Stockholm. India’s Commerce and Industry Minister Suresh Prabhu is in Sweden together with a delegation of several hundred representatives of India’s government and business. He is meeting representatives of the Swedish government, such as Prime Minister Stefan Löfven and Trade Minister Ann Linde and will also participate in Make in India. The aim is to encourage companies within 25 specific industries to station their manufacturing in India.

Speaking to Dagens Nyheter (DN) he says, “We are trying to liberalise for foreign investment more and more. There are openings within all industries.”

New SAS share issues does not appeal to Sweden

On Friday morning, SAS announced the airline will hold an extra meeting on 3 November to seek authorisation for a directed share issue. If the application is approved the company will have the right to issues 66 million common shares, 30% of the total common shares.

Principle owners Denmark, Sweden and Norway are expected to back the request. However in press release from the government, Enterprise Minister Mikael Damberg says the state is not going to buy shares as it is not a long-term owner in SAS