Borg slams EU over bank aid reviews

Swedish finance minister Anders Borg openly called European Commission "bureaucratic” on Tuesday, saying the EU body’s approach to assessing state bailouts of troubled banks hasn’t helped frozen credit markets.

“We need to restore the credit channel. The commission has not been constructive,” Swedish Finance Minister Anders Borg said.

“I do think that we have to pull off these legions of state aid bureaucrats.”

In the face of the worst crisis in generations, many EU governments have rushed to prop up banks through measures ranging from nationalization to recapitalizations and loan guarantees.

The European Commission, the European Union’s state aid watchdog, has vowed to review state support for troubled banks more quickly than normal as well as be more flexible than usual.

However, Brussels has drawn fire for requiring too many guarantees that competition would not be stifled by the bailout plans.

“We need help from the European system to restore the credit system. I think we need to have a difficult debate today in order to push through a new proposal for the next EU summit,” Borg told a group of journalists, according to the TT news agency.

“We need to get credit flowing to households and business. Fiscal policy or monetary policy isn’t going to be enough if we don’t get the credit system working again. We have to get our priorities straight,” he said, adding that he thought there was a risk of “a huge policy mistake”.

German finance minister Peer Steinbrueck also echoed Borg’s criticism.

“You shouldn’t react to such a financial crisis in such a bureaucratic manner,” he said as he arrived for talks with his EU counterparts.

The commission’s misgivings over a massive capital infusion into German bank Commerzbank has grated on nerves in Berlin.

Over the weekend, a cloud of uncertainty hung over French plans to help troubled banks amid reports that Brussels was preparing to reject them, which it later denied.

EU Competition Commissioner Neelie Kroes, who is in charge of reviewing state aid, was to meet with EU finance ministers during their meeting in Brussels.


EU ban ‘erases two-thirds of Swedish snuff’

The EU's new tobacco directive could threaten as much as 70 percent of existing sorts of snus on the market, snuff makers Swedish Match has warned.

EU ban 'erases two-thirds of Swedish snuff'

While the battle for Swedish snuff is not new, the National Food Agency (Livsmedelsverket) has now weighed into the debate by submitting its analysis of the suggested directive to the Swedish government.

“It is clear that many types of snus would be banned,” Food Agency inspector Christer Johansson told the TT news agency on Friday.

The European Commission has suggested that a panel of snus tasters rule whether a product has a clear enough “tobacco taste” to be allowed onto the market.

“It will be up to the panel to decided what a ‘clear taste’ is,” Johansson said.

The European Commission, meanwhile, has claimed that a ban on “non-tobacco” flavouring from tobacco products would knock out about ten percent of the Swedish snus sales.

Yet tobacco giant Swedish Match has said the directive could knock the air out of as much as 70 percent of its snus offering.

The peculiar Swedish snuff – inserted under the top lip by users – is sold in a variety of sizes, either prepacked in small pouches or loose. Aromas from licorice and spearmint to apple and eucalyptus have been added to the shelves in recent years. Vanilla, juniper and bergamot have also sneaked into the reportoire.

The lack of precision in a test panel’s subjective tasting has instilled fear and fostered irritation among snus makers.

“We think it could affect between 30 and 70 percent of our snus types,” said Swedish Match spokesman Patrik Hildingsson to TT. “That’s how big our uncertainty is.”

He dismissed the Commission’s analysis that the directive would deflate profits by ten percent. Hildingsson said it was comparing apples and oranges, as Swedish Match was not solely looking at sales income but the variety of their products. He also questioned the figure’s validity.

“That figures comes from one single analyst at one single bank,” Hildingsson said, further adding that a test panel would offer no guarantees of quality or consistency in its rulings.

“Surely there is no industry that wants that level of uncertainty?”

TT/The Local/at

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