Sweden’s central bank, the Riksbank, has postponed plans to tighten monetary policy over concerns about sluggish inflation, keeping its repo rate at -0.50 per cent. Deputy governor Henry Ohlsson entered a reservation against the decision, advocating raising the rate to -0.25 per cent.
Analysts are now suggesting that a raise in the benchmark rate could be pushed back until 2019.
The government is to inject SEK 50 million into organic food production in response to growing demand. The initiative is expected to create some 10,000-15,000 jobs in the industry, according to Sven-Erik Bucht, the minister for rural affairs.
The total value of sales of organic food amounted to SEK 3.9 billion in 2016, an increase of 18 per cent. This corresponds to 8.7 per cent of total food sales, reports Ekoweb.
The government’s goal is for 30 per cent of Sweden’s agricultural land to be organically-managed by 2030. Sweden currently has an organic share of farming of around 18 per cent.
When Sweden’s Handelsbanken (SHB) submitted its annual report for 2017 in February this year, the profit and loss account was weighed down by a record-high credit loss in the UK. Dagens Industri has now gained access to a report by the UK’s financial regulator, the Financial Conduct Authority (FCA), dated 18 August 2017, criticising Handelsbanken’s UK management, which has failed to maintain an adequate anti-money laundering framework. Among other things, “there has been a lack of investment in financial crime resources” and the “shortcomings are affecting the bank’s effective management of financial crime risks. Overall, we assess the weaknesses identified to be the result of senior management failure to implement and maintain an effective financial crime framework”.
The FCA has since sent a report to the Swedish Financial Supervisory Authority (FSA), which has confirmed the document is “part of an ongoing review” of the bank.
SHB says it has taken a number of measures to improve its routines, in accordance with the FCA’s requirements.
Dagens Industri reported on Monday that the government’s housing policy flagship – investment aid – has failed to produce a single, affordable rented property in Stockholm. Over 80 per cent of the apartments built with the investment aid are outside Sweden’s ten largest municipalities.
Green Housing Minister Peter Eriksson does not find that there is any cause to question the subsidy – he blames the lack of affordable housing in Stockholm on the construction companies which, he says, are only interested in building expensive properties in the capital
One of the election promises made by the Social Democrats in 2014 was to speed up housing construction and make it easier for young people to find a home they could afford. The government allocated SEK 3.2 billion annually in housing subsidies for new, affordable rental properties but to date the reform has had little impact; just 9,000 of the more than 200,000 homes constructed during the government’s term of office have been built as a result of the investment aid, primarily in areas where there is no housing shortage.
This has irritated many local government politicians in Sweden’s metropolitan areas and in Stockholm the Social Democratic-run council has gone so far as to condemn the reform. The construction industry is also critical, with Johan Skoglund CEO of builder JM saying the government has actually made it harder for young people to enter the housing market.
The Stockholm Chamber of Commerce and the British think tank Oxford Economics have warned in a report that the Swedish economy will suffer and thousands of jobs disappear if the negotiations over the UK’s exit from the EU fail. Almost two years have passed since the Brits voted to leave the EU but it is still unclear how the relationship between the EU and the UK will be formed after Brexit.
According to Andreas Hatzigeorgiou, head economist at the Stockholm Chamber of Commerce, a hard Brexit would hit Sweden because Swedish exports would experience high tariffs. The UK is Sweden’s fourth largest export market, and Stockholm in particular, exports more to the UK than to any other country.
The Chamber believes that up to 8,200 Swedish jobs would be at risk, a quarter in Stockholm. Swedish GDP would be 0.3 percentage points lower up until 2020. The price for Swedish exports to the UK would increase by five per cent, which would lead to lower salaries.
On Wednesday morning the alarm was raised that a fire was spreading in the Stockholm Stock Exchange’s server hall in Upplands Väsby. It proved to be a false alarm but the sprinklers had been triggered, equipment damaged and Lauri Rosendahl, CEO of the Stockholm Exchange and Nasdaq Nordics, decided to delay opening.
The delay lasted over five hours with trading opening at 2.10pm as it took a long time to get all the fund commissions, banks and traders online once the reserve was up and running.
Lauri Rosendahl has apologised for the long wait and has said that if this were to happen again it must be resolved much more quickly. Damage continued to be assessed through the night.
The Financial Supervisory Authority (FSA) demands that Nasdaq has arrangements for operational continuity so it can re-start trading within two hours in the case of a disruption, and the watchdog now wants to know why this did not happen.
Sweden and India have launched a partnership for environmental innovations, announced Prime Minister Stefan Löfven (S) and his Indian colleague Narendra Modi, who is visiting Stockholm. Both heads of government are promising greater defence and security cooperation as well.
Löfven explained that the countries are working on a security agreement including the exchange of confidential information for defence purposes. Cyber-security was used as an example.
Prior to the meeting, there had been speculation around the possibility of India buying Gripen aircraft, a deal estimated to be worth SEK 100 billion. “This is nothing that can be decided at a meeting like this. India has an open and transparent process and I think that is good, but once again, it is India who is to decide,” said the prime minister.
Saab CEO Håkan Buskhe is extremely positive about a Gripen deal with India and says India will make a decision within two to three years.
Today the government has a final chance to impress voters with investment before the election. Together with the Left Party, the Social Democrats and the Greens have agreed on investments into everything from healthcare to summer jobs for young people.
The National Institute of Economic Research (NIER) says that the government’s expansive policy means that neither the current nor new surplus targets will be reached. Recently seven of eight parliamentary parties agreed to reduce the target to a third of a per cent. However, NIER believes that even this less ambitious target will not be met. Whether the finance minister is Magdalena Andersson or Elisabeth Svantesson in the autumn, she will need to save.
“All actions need to be financed krona for krona. That is our message to the next government,” says Ylva Hedén Westerdahl, NIER’s forecasting head.
Sweden was singled out as an alarming example in Hungary’s recent elections, wrote Annika Ström Melin in DN last Saturday. When Education Minister Gustav Fridolin visited Budapest recently, journalists showed little interest in the Swedish educational system, instead suggesting that press freedoms were under attack in Sweden and asking the minister when Swedes would begin to seek asylum in Hungary. Equally though, Hungary may be singled out in much the same way ahead of the Swedish elections.
Politicians often cite negative developments in other countries during election campaigns but what is special in this instance is the debate over the image each of the two countries wants to project that is taking place in the EU. The lines between domestic and EU issues are becoming increasingly blurred, argues the journalist.
EU cooperation is now so deep that member states’ dependency on each other is far greater than anywhere else in the world. A clear example of the EU’s importance is the arrest warrant, which can have far-reaching consequences for individuals accused of crimes in another EU state, and who more or less automatically are sent back to face trial.
The politicisation of the Polish and Hungarian judiciaries does not just affect the two countries’ citizens; in principle it affects everyone in the EU which is why the European Commission has become involved.
EU member states cannot individually decide immigration policy either, so no matter how the Hungarian government feels about refugees it must be party to the common EU migration policy, otherwise it cannot remain in the EU in the longer term. In other words, the battle over the images of Sweden and Hungary is serious politics, she concludes. (7/4 DN I: 17)
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