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Alliance faces defeat in sale of state-owned firms
Swedish Financial Markets Minister Peter Norman

Alliance faces defeat in sale of state-owned firms

Published: 21 Jan 2011 12:12 GMT+01:00
Updated: 21 Jan 2011 19:03 GMT+01:00

The Sweden Democrats announced their support for the opposition's proposal when it was first presented on Tuesday, and the Left Party has also said it will back the motion, Sveriges Radio reported on Friday.

State-owned enterprises that would be up for grabs include Posten Norden, TeliaSonera, SBAB and Vattenfall.

"We will almost certainly support the line of the Social Democrats and the Greens," Sweden Democrat spokesman William Hahne told AFP.

The government, which does not have a majority in Sweden's parliament, the Riksdag, plans to sell state assets worth 25 billion kronor ($3.8 billlion) per year during its current term in power.

When Prime Minister Fredrik Reinfeldt's coalition government first came to power in 2006, it received parliamentary backing for its plans and has already sold Absolut Vodka maker Vin & Sprit, a chunk of telecoms giant TeliaSonera, its share in the Nordic and Baltic stock exchange operator OMX and part of the postal service, among others.

Before winning re-election last September, the government reiterated its intention to let go of part or all of TeliaSonera, Nordea bank and mortgage lender SBAB. It has said energy company Vattenfall and its share of Scandinavian airline SAS could also soon go on the block.

The government however lost its parliamentary majority in last year's vote, which ushered the far-right Sweden Democrats into the house for the first time and if the opposition parties join forces they can block the planned sales.

The motion will likely go to a vote sometime in March and Hahne of the Sweden Democrats said the party's mind was almost made up.

"We are among other things against having Swedish energy production interests fall under the influence of foreign power games," he explained.

"The state should control the very important infrastructure, like for instance water (hydro) power," he added.

Financial Markets Minister Peter Norman pointed out he had just received the opposition's motion and had not yet had time to analyse the effects in full.

"However, it is risky to own shares in the financial sector. During a financial storm, those who possess a large amount of state debt can get in the most trouble. As such, it is important to force down the national debt," he said at a press briefing.

"I also noticed that Nordea is not on the list, so we will proceed with the sale of Nordea shares. The Nordea plan is still on track," he added.

Norman also emphasised that the government has no plans to try to form a majority with the Sweden Democrats.

"We have no contact with the Sweden Democrats and it still applies," he said.

Speaking later on Friday with the AFP, Norman blasted the planned opposition motion.

"It is unfortunate ... The plan was to try to raise 100 billion kronor ($15 billion) for state coffers by selling shares of (Nordea, TeliaSonera and SBAB)," he said.

"That would entail reducing our public deficit by the same amount," he said.

"We clearly saw amid the financial problems last year that countries with high public deficits can be in a lot of trouble, so this is unfortunate for both Sweden and the tax payers," he said.

The announcement of the Sweden Democrats' support for a halt to the selloff of state-owned assets sent the krona falling to 9 kronor against the euro, its lowest level so far this year.

The decline is also in line with the global strengthening of the euro, however.

The currency received a boost last week after European Central Bank President Jean-Claude Trichet said that inflationary pressures in the eurozone could imply that the ECB was prepared to begin raising its key interest rate from a record low this past autumn.

"The euro has strengthened against both the krona and other currencies, even against the dollar. After that, there may be a halt in state selloffs on the margin. It probably plays a small role. However, it is not the main cause of the krona weakening," said Jenny Mannent, currency strategist at Handelsbanken, to the TT news agency.

The reaction to the Sweden Democrats' announcement mainly relates to the market envisioning a smaller flow of foreign currency in Sweden than expected should state-owned companies not end up on the auction bloc. This in turn negatively affects the exchange rate.

"It is of course expected that there would be some foreign buyers here. From a flow point of view, it is negative for the krona," explained Mannent.

TT/AFP/The Local (news@thelocal.se)

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Your comments about this article

12:39 January 21, 2011 by big5
According to Expressen, the xenophobic Sweden Democrats expressed the worry that Swedish "Vattenfall" might be bought by "some Middle Eastern country, for example".

"Det skulle se väldigt märkligt ut om Vattenfall skulle börja säljas ut och så skulle en annan stat, kanske i Mellanöstern, börja köpa upp det här företaget."

http://www.expressen.se/ekonomi/1.2299690/oppositionen-hotar-stoppa-utforsaljning

The only way the red-greens can pass this is by getting the support of these Sweden Democrats with their racist innuendo, something the red-greens shrilly and solemnly promised never to do during the election campaign.
13:15 January 21, 2011 by Nemesis
Selling of state assets is what happened in the UK.

All that did was make a few select bankers and brokers rich.

It forced up prices and standards down.

Ordinary people have had to bear the brunt of the price rises and lack of good service since privatisation.

Opposition to this paln is a good idea.

This plan is purely to put money into a few pockets of some already rich people at the expense of the nation.
15:31 January 21, 2011 by Acero
LOL @ Big5. Nice comment!

Ya gotta hand it to them SD's!

"Vattenfall" might be bought by "some Middle Eastern country"......its so wrong of them to say it...but kinda right....just ask the yanks have they the sh*ts with who owns all their large ports!!!

I think Sweden should stay swedish myself :D
15:36 January 21, 2011 by Dr_B
Good idea to block this.

Having lived in the UK through all of our privatisations I would concur with Nemesis that a small number of people become extremely rich out of this and the general public suffer. Its literally a licence to print money for those with financial interests in former state-run industries...a good gig if you can get it.

Just take our railways for example, still as big a shambles as they ever were but year after year the management and execs award themselves lavish bonuses despite not delivering any improvement.

The short term benefits are not worth it.
20:07 January 21, 2011 by miss79
oh my god, then sweden will be NOTHING left..fredrik, u really messed up the whole thing in sweden now!
01:25 January 22, 2011 by Crocs
If the SD's oppose this even for their bizzare racial twist on things then great! Selling off state assists is not exactly a good thing for the people of Sweden, great if you're up on top and will have a nice hefty bonus on the way, but as another poster said, it will just lower the standard of living and push up every day costs.
10:13 January 22, 2011 by Ravioli
They did not oppose it for any racial reason. Give that angle a rest for a minute. Jeez.
11:46 January 22, 2011 by Borilla
The same people who have been crowing about how well the Swedish economy is doing are now saying that the Swedish people's assets must be sold in the private sector because high public deficits can be a lot of trouble. It seems to me you can't have it both ways. If the economy is doing so well, why do public assets need to be sold? Those commentators from the UK are absolutely correct. Sale of public assets to the "private sector" puts money in the pocket of a few insiders in that "private sector". One of the best examples is British rail which seems to be running neck and neck with SJ for dismal performance but continues to line the pockets of that "private sector". It is so nice to have friends in high places.
16:10 January 22, 2011 by AHA
Statistics show that the SDs casted their votes with the Alliance on 90% of the proposals in the parliament. In this case they have come to their senses. Please mr Reinfeldt, STOP SELLING THE COUNTRY.
11:47 January 23, 2011 by big5
@Ravioli: "They [SD] did not oppose it for any racial reason."

SD expressed the concern that countries "in the Middle East" might purchase shares in Swedish corporations. This plays on voters' prejudices against Middle Easterners.
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