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ECONOMY

Thailand in favour of Sweden’s Gripen

"It seems positive," said Defence Minister Leni Björklund following talks with Thai officers and political leaders over Thailand’s possible procurement of the JAS 39 Gripen fighter aircraft.

The Defence Minister, who has been on a one-week visit to Singapore and Thailand, also told TT that she sees “a huge amount of interest in the Gripen, which is something the industry (Saab) should exploit”.

Björklund has held talks in Singapore over continued naval co-operation. Singapore has previously purchased four second-hand Swedish submarines and crew have received training in Sweden. With the forthcoming defence cuts in Sweden, several Swedish submarines are likely to be redundant. The Defence Minister sees that there is opportunity to discuss new business, should Singapore decide to extend its fleet, reported SvD.

Ericsson suspected of paying bribes…

Telecom equipment manufacturer Ericsson is suspected of having paid out 1 billion crowns in bribes to Russia, reported DI.

The payment was apparently made from Ericsson’s EMK company in Switzerland, via Austria, to Russia during the autumn of 1999. At the end of the Nineties, Ericsson had problems breaking into the Russian market, which was judged to have huge growth potential.

…and wins order from 3

Ericsson has won an order to supply radio and transmission equipment and related services in Sweden, Norway and Denmark from 3G operator 3. The order is worth some 2.55 billion crowns.

Nordic Capital acquires Falck

Swedish Nordic Capital is to acquire Danish rescue services company Falck A/S for approximately 6 billion crowns. Nordic Capital has plans to expand Falck’s unit for roadside breakdown assistance in Sweden.

Falck A/S is a hive-off from Group 4 Falck and went public in July. The company is expected to post turnover of 5.8 billion crowns this year.

Clothing cheaper next year

Clothes prices are expected to fall by as much as 15-20 per cent next year when the EU abolishes import quotas on clothing and shoes. Imports from China and India are expected to rise drastically.

Consumer debt slowly declining

Finaninspektionen (the Swedish Financial Supervisory Authority) has reported that household debt rose by 30 billion crowns in Q3, which may be compared with 45 billion crowns in Q2.

During the first nine months of the year, households’ financial assets rose by 2.1 per cent to total of 2,447 billion crowns. During the corresponding period in 2003, households’ financial assets rose by 7.6 per cent, mainly as the result of a stronger market upswing.

Sources: Dagens Nyheter, Svenska Dagbladet

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ALMEDALEN 2022

Swedish finance minister: voters may have to accept falling real wages

Sweden's finance minister had told The Local that this year's election will largely be about rising costs, but that his party is not planning to intervene to prop up real incomes and so worsen inflation.

Swedish finance minister: voters may have to accept falling real wages

Speaking at a seminar on Sweden’s economic situation hosted by Swedbank, Mikael Damberg agreed that the coming campaign would be a so-called plånboksval, or “pocketbook election”, where rising costs and falling spending power are the dominant issue, but he said he thought this would benefit rather than harm the Social Democrats. 

“Economic issues will be very important,” he told The Local, “and I think people will think about who will be best in charge of the public finances, and who has been in government and handled tough situations, and I think that Magdalena Andersson, as the Prime Minister with seven years as Minister of Finance, is the right woman to lead Sweden in these difficult times.”

His worry, he said, was that Sweden’s political parties would respond to inflation levels of close to eight percent by promising voters subsidies and cash transfers to make up for rising prices, which if implemented would then risk fuelling an inflationary spiral. 

“It might be |a problem] if the parties draw the wrong conclusion, and think that they can spend a lot of money right now. Because if they spend too much money, too broadly, not focusing on vulnerable groups, then inflation will go up, and interest rates will go even higher. And that would actually worsen the situation in the wallet for ordinary people.” 

Instead, Damberg said that people living in Sweden would ideally simply tighten their belts and tolerate a period of falling real incomes. 

“For 25 years in Sweden, we have had real wage increases for ordinary workers, and that’s kind of unique on an international perspective. So this year, there will be a drop in real wages because of inflation,” he said.

He said that he hoped that in next year’s negotiations between unions and employers over new collective bargaining agreements, unions were as responsible as they have been historically, and avoided calling for inflationary pay hikes. 

“It’s tough. The war has made us all less rich, and some groups will be affected very much. But I think, there’s no point in getting wage increases if it pushes inflation higher. The trick here is to get wage increase that are for real, and not just on paper.” 

In the seminar, he said that there was a danger that the huge emergency spending packages Sweden, like other countries, had put in place to soften the impact of the Covid-19 pandemic would set a precedent, leading voters and politicians to think it was possible for governments to spend their way out of the coming economic difficulties in a similar way. 

His intention, he said, if he was reappointed finance minister after the election, would be to keep the tax rate roughly level with where it is now, neither raising nor lowering taxes, in the hope that Sweden’s state finances go into a small surplus next year. 

He said it had been right this year to pass measures to increase the incomes of the poorest families and the poorest pensioners, and that his party would still seek to give aid targeted those least able to cope with rising prices. 

“Politics has a role,” he said. “But you need to be careful not to create too big a role, because if you think that politics can do everything, then we will start fuelling inflation. It’s a lot harder now than it was in the pandemic.” 

Shortly before the seminar, Ulf Kristersson, leader of the opposition Moderate Party, made a speech in which he accused the government of bringing in 46 new taxes over the last four years, and together in a “left-wing cartel” with other parties of planning a series of tax hikes, including a property tax, a tax on savings, a wealth tax, a tax on the highest incomes, and a reduced tax break on cleaners and other households services.

“I think they’re a bit desperate, because they’re not doing that well in the polls,” Damberg said. “So one way [of improving the situation] is to try to frighten voters. But I think our record speaks for itself, and I think Magdalena Andersson has got a lot of credibility when it comes to handling Swedish economy.” 

“She has not introduced a property tax, and she has not in the last period in government increased the tax burden on ordinary people. If you look at the tax burden in Sweden over the last period, it’s gone down, not up.”

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