Month: April 2016

Not necessarily the end for nuclear power

The government recently announced it wants Sweden to move towards a completely renewable energy system, a decision that has caused concern because of potential supply shortages for business if nuclear power is phased out. However, on Wednesday Energy Minister Ibrahim Baylan clarified that the new model does not necessarily mean the end for Swedish nuclear power.

If there is a strictly business line basis for building new nuclear power plants then this should be made politically possible, he stated. “There may be a situation where we produce 120% of our need and export the rest,” he says. However, he does not believe this will happen. “Nuclear power is experiencing difficulties with or without taxes and will sooner or later be phased out,” he says.

Instead Ibrahim Baylan considers hydropower to have huge potential to supply the basic industries. “We need to reduce the political risk so that the market is able to invest,” he says.

Conflict could drag on

The conflict within the construction industry risks being a long one. Yesterday a total of 2,500 construction workers went out on strike, affecting at least four times as many workers, and employers reacted with a lock-out. At least 9,700, and up to 12,000, workers will be locked out of workplaces from 22 April, if no agreement is reached.

According to the Swedish Construction Federation (Sveriges Byggindustrier), construction companies are losing between SKr 100 and 200 million every day. The union, Byggnads wants a pay rise of 3.2% and the industry benchmark for pay rises to be set at 2.2%

State appointed negotiator Jan Sjölin, who has been helping the parties try to resolve the conflict, says the situation is in deadlock. “There will be no negotiations for the next few days,” he says.”

“Close Bromma, expand Arlanda”

The government’s investigator Anders Sundström, recently ousted as chair of Swedbank, presented his solution yesterday for the politically controversial struggle over Bromma Airport.

He wants to expand Arlanda with a fourth runway as he estimates the flights to and from the airport will have doubled by 2040. On the other hand Bromma, which has barely a third of domestic traffic, is not needed, he concludes. Instead Stockholm would be able to build 30,000 houses in its place.

He claims the Arlanda project must be complete by 2035, as it is of utmost importance for Stockholm to be able to compete with capital cities in neighbouring countries. Therefore Bromma Airport can remain until 2038, when its current contract expires.

Divisions over US customs in Arlanda

Arlanda has been chosen as one of few airports where passengers could pass through US customs before their journey begins.

According to Mikael Damberg, minister for enterprise, Sweden is participating in negotiations and he hopes for an agreement later this year. “It would ease travel and make Arlanda an attractive airport for airlines that want simple routes between Europe and the USA. It also means a lot to those companies with their head offices close to Arlanda and it could attract new companies here.”

Among the airlines, Norwegian is very positive although its enthusiasm is not shared by SAS, where there is concern the pre-clearance could benefit Norwegian and create problems for SAS. For example, extra time would be needed for passing through customs, which could worsen connections for those flying into Arlanda from other parts of the country.

Norway strikes Saab a blow

The Saab defence group’s hopes of supplying Norway with future submarines were dashed on Thursday, when Norway’s Ministry of Defence said it had shortlisted Germany’s Thyssen Krupp and France’s DCNS as possible suppliers.

Defence Minister Ine Eriksen Søreide said that a submarine cooperation with either France or Germany would ensure that Norway would get the submarines it needed, while contributing to “a more efficient armaments cooperation in NATO”.

The minister also made clear that Norway would be willing to cooperate with other countries in need of new submarines, namely the Netherlands and Poland.

Ingves signals time for a rethink

In a speech at the Stockholm School of Economics on Wednesday, Stefan Ingves, the governor of the Riksbank, said, “we find ourselves in a situation where the strategies and regulatory frameworks followed by central banks in the past decades must be reassessed”.

He also said that consideration needed to be given to appropriate target variables and the need for a tolerance range. Another question that needed to be considered was whether inflation targeting should take into account financial stability. Furthermore, there was much to suggest that financial stability should be a target not only for macro-supervision, but also for monetary policy.

Nordea chief economist Annika Winsth believes Mr Ingves speech is a step in the right direction towards a more flexible view of inflation and monetary policy, but SEB chief economist Robert Bergvist feels the speech was lacking in substance.

Nordea lent billions to oligarch

In an Uppdrag Granskning programme to be broadcast this evening, SVT will report that Nordea loaned three billion kronor, via mailbox companies set-up in tax havens, to the Kazakh oligarch Serzhan Shumashov, who is close to Kazakhstan’s autocratic president, Nursultan Nazarbayev.

“This is as bad as it can be,” says Albin Rännar, head of market watch for the Swedish Shareholders’ Association (Aktiespararna).

Per Bolund, the minister for financial markets, says the revelations give “cause for concern”. He presumes that the Swedish Financial Supervisory Authority (FSA) will look into the allegations, as part of its investigation into Nordea following the Panama Papers leak.

Nordea could face hefty fine

Sweden’s Financial Supervisory Authority (FSA) took immediate contact with the Luxembourg authorities after Sunday’s “Panama Papers” leak, indicating that the Nordea banking group had helped wealthy clients set up accounts in offshore tax havens.

Christer Furustedt, head of the FSA department overseeing the Swedish banks, says the allegations are serious. He notes that trust lies at the heart of banking, therefore “it is important that banks comply with the rules”.

The watchdog will meet with the bank’s senior management today to demand an answer to a number of questions.

As recently as May 2015, Nordea was fined SKr 50 million for deficiencies in its appliance of anti-money laundering rules. The bank could now face up to SKr 5-6 billion in fines, if Sunday’s allegations prove to be true.

Nordea helps clients with tax havens

Public service broadcaster SVT has gained access to the 11.5 million documents leaked from Panamanian law firm Mossack Fonseca, and found that Nordea, in cooperation with the law firm, offers some of its richest clients the means, via mailboxes in Luxembourg, to hide their wealth in tax havens.

Thorben Sander, CEO of Nordea Luxembourg has confirmed the news in part, but says that the bank changed structure in 2009 and now has few such mailboxes. According to SVT, however, Nordea still has 100 active mailboxes.

Suppliers demand faster payments

It is not unusual for small companies to have to wait 90-120 days for payments, meaning that recruitment and investment must wait. Legislation passed three years ago has not had any effect, according to suppliers, and they are critical of Enterprise Minister, Michael Damberg. The law means payments within the public sector must be made within 30 days but for private companies it is an issue of negotiation.

Michael Damberg says he is aware that long payment times are damaging to jobs growth but wants to first evaluate the earlier legislation before proposing new changes.