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Borg calls for renewed privatization drive

Borg calls for renewed privatization drive

Published: 08 Aug 2010 11:10 GMT+02:00
Updated: 08 Aug 2010 11:10 GMT+02:00

Minister for Finance Anders Borg has indicated that the government intends to raise 100 billion kronor ($14 billion) by selling off the state’s shareholdings in a number of companies if voted back into power in September.

A first step in the privatization process could entail reducing the state’s holdings in telecoms giant TeliaSonera and Nordea bank.

“We’re expecting sales revenue of 25 billion kronor each year during the next term of government. It’s an important part of our plan to pay off the national debt,” Borg told business daily Dagens Industri.

Since the last election, the government has put TeliaSonera, Nordea, SAS and mortgage lender SBAB in the shop window, but Borg could not say for sure which companies would come under the hammer in the next four years.

Centre Party leader Maud Olofsson has previously expressed a willingness to sell off part of Vattenfall’s overseas assets and to bring some private partners into the energy firm's ownership structure.

Social Democrat party secretary Ibrahim Baylan has responded to the proposed privatisation drive by demanding that the government outline exactly which state companies it intends selling. He also rejected as “terrible financial management” a plan to sell off holdings in companies providing substantial revenue to the state coffers in order to “amortize a debt at a time when interests rates are at a record low”.

“The right-wing parties are presenting so many solutions at the moment. The only thing they same to agree on is the need to sell,” Baylan told news ageny TT.

Minister for Financial Markets Mats Odell was not sure whether the government would present a list of companies for sale as it did in the lead-up to the last election.

“I can’t say exactly the form it will take but I can promise that we’re not going to sell off any state companies at knockdown prices. We’re only going to sell when we consider it really good business for the country,” he told Dagens Industri.

A certain level of privatization could remain on the cards even if there is a change of government. On Thursday, Social Democrat economic policy spokesman Thomas Östros welcomed the Centre Party proposal to sell off some of Vattenfall’s foreign assets. Ibrahim Baylan meanwhile has indicated that the largest opposition party could envisage selling Sweden's shareholding in troubled airline SAS.

TT/The Local (news@thelocal.se)

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Your comments about this article

14:53 August 8, 2010 by 2394040
When does he plan to turn over government to the rich?
16:04 August 8, 2010 by glamelixir
Privatization is one of the worst things that happened to countries.
17:34 August 8, 2010 by Jan M
Sell offs are irreversible. If an individual has a debt but also has investments in profitable companies those investments are viewed as long-term assets and are counted as a debt offset in any case. If such an individual proposed the sale of those assets in order to write a one-off cheque to cover some of the debt, creditors would view that as short-sighted and desperate unless the debt had reached critical levels. As far as I'm aware the Swedish national debt is not a critical burden to the Swedish economy.

Britain went down this road in the 1980s and is now screwed. It doesn't need to be this way.
04:32 August 9, 2010 by Tall swede
Sweden do have a national debt. And the sale of vin & sprit made it possible to pay back some of it. The decreased interest on the debt is twice the size of the profit from that company. And that is guaranteed in the long run, and not uncertain like the profit of the company.
09:39 August 9, 2010 by Jan M
And the national debt and interest payments rise again when unemployment increases and tax receipts fall. You see there's not such thing as a certainty but painting by numbers economics really doesn't work. As for profits from vin and sprit being unpredictable, that type of business tends to do well in an economic boom and just as well in an economic downturn. I'll let you figure out why.
11:06 August 9, 2010 by Great Scott
Jan M you hit the nail on the head. I would also like to add that when companies are sold off they become expensive, unreliable and inefficient for the public.

Another reason for selling public assets is to fund tax breaks for the rich. As in the UK this money is NEVER seen by the public.
11:11 August 9, 2010 by Kooritze
Employment laws have changed dramatically in Sweden to the extent that many have short contracts, work through agencies and thus no security for the future.

When I see this headline I immediately see familiar trends that I have seen before in the UK reminicent of the Thatcher years.

Privatization will generate short term revenues but will change your country forever...........and not for the better. I also see other trends, the military is now a voluntary paid force, are already in Afghanistan which makes the country,s neutrality farcical. Next stage will be joining Nato, US bases on your territory perhaps. It,s a real shame.
13:11 August 9, 2010 by Taxalien
It is reasonable to privatise companies. Vin och sprit didn't start out as state owned companies. They were private entities that the then more traditionally influenced liberals in the first chamber wanted nothing to do with. It was only as the first chamber became filled with paternalistically oriented liberals (s) that they agreed to buy the company and complete the monopolisation of alcohol in Sweden.

Now, the problem with Swedish politics is that through the last 10 years each government has pillaged roughly 100-140 bn kr by either stealing the money from the pensionsystem or by selling out these companies. It is nothing other than window dressing the poor finances and the structural problems that manifest itself in a country that uses socialism as a planning tool to influence and distort competition throughout the whole economy.

If you remove these temporary effects on the public debt, you can see that it is either stagnat or clearly rising all the time.

The policies of the alliance government is a failure. The other reds and greens would be even worse. If you want a different choice a different mind set is required and that mindset has to start by critically challenging all the intellectuals in this county who believe that common sense ideas is all that is needed to fix the problem with poor planners in politics and government.

The reality is that the planners must be sacked and the individual freedom that Sweden was renowned for before 1960s restored. That is when we had the 2nd strongest economy in the world. There is only one country that grew faster than Sweden and that was Japan.
13:12 August 9, 2010 by miss79
after privatising apoteket n sjukvård now this?wow, alliansen is making money n getting richer where as people here in sweden 60 percent are getting poorer..
13:57 August 9, 2010 by Audrian
At a superficial level the settling of debt by the present government might appear to be a good thing. In effect what the government is doing is to change the country's policy, and make it similar to what the US has been implementing since 1970s (since president Regan). This failed policy (neo-consevative policy) was beset by several recessions and rising income gap in favor of the rich in the US. The US is one of the most stratified countries in the world. There are several million children who go hungry everyday. Save the Children (an organization meant for poor countries is engaged in food distribution to poor children in the US).

In Sweden a tiny minority wants Sweden to implement a neo-conservative policy (where the rich control the state). This government which is also after the same thing is taking a round about measure to reach it. Reason: A recent survey shows Swedish people do not support a neo-conservative policy.

These companies are profit making companies. Debt can be paid from the profit these companies are making. If the debt is too bog the government can still keep major ownership (51%) and sell the rest in the open competitive market. Once the debt is fully paid, the government can start buying the 49% and be full owner.

Private ownership does not necessarily bring efficiency, The British rail way company is more inefficient under private control than it was under government control. The same thing can be said of banks which brought an economic melt down and threatened the stability of capitalism!
19:26 August 9, 2010 by americanska
@glamelixir - you said:

"Privatization is one of the worst things that happened to countries."

That is like saying "The internet is the worst thing that happened to communication."
11:24 August 10, 2010 by scorpion69
Be careful in New Zealand after its electricity network was privatised prices went up services went down along with maintenance so much so that its major city Auckland was without power for about a week.
12:11 August 10, 2010 by americanska
A week without power - that might be a record repair time for the goverment run infastructure in sweden. Nearly every year there are people without power for days/weeks for some reason or another.
17:48 August 10, 2010 by Great Scott
11:24 August 10, 2010 by scorpion69

Be careful in New Zealand after its electricity network was privatised prices went up services went down along with maintenance so much so that its major city Auckland was without power for about a week.

This is not unique to New Zealand, it happens the world over.
10:48 August 12, 2010 by NickM
Apparently, this story received hardly any mainstream media attention in Sweden.

Hmm, the mainstream media are owned by ultra rich powerful private corporations. I wonder why they would possibly choose to suppress something that would make them richer?
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