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EURO

Alliance faces defeat in sale of state-owned firms

Sweden's ruling minority Alliance coalition may lose yet another vote in parliament after the Sweden Democrats announced their intention to support a motion tabled by the Social Democrats and Green Party to stop or restrict the sale of state-owned enterprises.

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

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.

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GOVERNMENT

Governments including Sweden’s see support tumble for their handling of COVID-19, survey shows

Governments are fast losing support for their handling of the coronavirus outbreak from a public that widely believes death and infection figures to be higher than statistics show, a survey of six countries including Sweden revealed on Saturday.

Governments including Sweden's see support tumble for their handling of COVID-19, survey shows
Sweden's Prime Minister Stefan Lofven (L) speaks with Denmark's Prime Minister Mette Frederiksen during an EU summit in Brussels on July 20, 2020. AFP

Support for the federal government of the United States, the country with the most reported infections and deaths, dropped by four percentage points from mid-June, with 44 percent of respondents declaring themselves dissatisfied, said a report by the Kekst CNC communications consulting group.

In Britain, just over a third of respondents approved of their government's actions, a three-point decline in one month, according to the report, based on an opinion poll conducted over five days in mid-July. 

It also included France, Sweden, Japan and Germany.

“In most countries this month, support for national governments is falling,” the report said.

The notable exception was France, where approval rose by six percentage points, yielding a dissatisfaction rate of 41 percent.

France, which has the world's seventh-highest COVID-19 toll, has all but emerged from lockdown but has seen infections increase in recent days, prompting the government to order face masks in all enclosed public spaces.

In Sweden, which took a controversial soft approach to lockdown and has a higher toll than its neighbours, the prime minister's approval rating has shrunk from a positive seven percent to a neutral zero, the poll found.

'Resigned'

People who participated in the survey —  1,000 per country polled — generally believed the coronavirus to be more widespread, and more deadly, than official figures show.

“Despite relatively low incidence rates compared to earlier in the pandemic in most countries (with the exception of the US), people significantly overestimate the spread and fatality rate of the disease,” Kekst CNC said.

In Sweden and Britain, the public believed that six or seven percent of people have died from the coronavirus, about 100 times the reported rate.

In the United States, respondents estimated that almost a tenth of the population had died of the virus, more than 200 times the real toll, while Germans thought their tally was 300 times higher than what has been reported.

Such views, said the report, “will be impacting consumer behaviour and wider attitudes — business leaders and governments will need to be conscious of this as they move to restart economies and transition into living with coronavirus for the medium to longer term.”

The poll also revealed that fear of a second outbreak wave is growing, and that an ever larger number of people believe the impacts will last for more than a year.

People “are becoming resigned to living with coronavirus for the forseeable future, and looking to leaders and business to pave the way forward,” the report said.

They are also increasingly likely to prioritise limiting the spread of the virus even if the economy suffers.

“In the US, 54 percent want the government to prioritise limiting the spread of the virus over protecting the economy,” it said.

The poll found that mask-wearing was generally popular, except in Sweden, where only about 15 percent of people sport a face-covering in public.

Even in the United States, where mask-wearing has become a politically polarising issue, 63 percent of respondents said they were in favour.

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