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The Mundus Brief is your chance to read a summary of what happened in Sweden last month and our chance to let you know what we’ve been looking into. We try to keep the Mundus Brief brief and entertaining; a counterbalance to our more serious news and analysis.
/The Mundus Team
| The best was exemplified by Greta Thunberg, a girl on a mission to make the world face up to the realities of climate change. Her action began with a simple act of quiet protest, refusing to attend school for 3 weeks, last August. After the September elections, she decided to keep going with the strike, every Friday. This unassuming act hit a chord, and soon millions of students were also protesting, in over a hundred countries, according to www.fridaysforfuture.org. She was invited to speak at the UNFCCC meeting last December, and at Davos, in January. In 8 short months, Greta has become a figurehead. In March, she was supported in her call by 270 scientists, lauded in the European Parliament by her Prime Minister and nominated for a Nobel Peace Prize by Norwegian politicians. In case you missed the phenomenon, The Guardian has an excellent write-up of the girl with high values, and what makes her tick.|
Unfortunately, there was another equally strong message about Sweden on display, as Swedbank self-destructed. The story broke in February, and when our last Brief went to print, it seemed as if it had further to run. It did. When the dust settles, this will become a classic business-school case, for how to mismanage a message and destroy a brand. Crisis management experts say that Swedbank broke just about every rule in the book during the crisis.
So, what went wrong? The FT reports one senior Nordic banker as saying, “Every sensible banker would say that prior to 2012, every bank processed things they wouldn’t process today. Everybody was at fault.” What changed was two-fold: new, stricter anti-money laundering rules from around 2013; and Russia’s annexation of Crimea a year later, which changed the tolerance for Russian money in the financial system greatly. Those interested in the details can read our collection of stories from Mundus News on the saga.
But, it was not just Swedbank’s brand that has been taken down; the mismanagement has rubbed off onto Sweden, and onto the region, as the FTs headline, “… banking’s Nordic noir”, this weekend highlights. “For the Nordic countries, whose way of life is built on high levels of trust, the impact could be disastrous. “It [the loss of trust] is the most unfortunate outcome of this. People in general don’t feel that banks are functioning properly or that regulators are credible. It will impact how people behave —at elections, or in everyday behaviour.” In March, the annual 2019 Förtroendebarometern(an annual measure of the general public’s confidence in various institutions) seemed to confirm this, with banks ranking amongst the institutions that Swedes had the least faith in. Only 24% of Swedes had confidence in the banks (curiously, Systembolaget, the state’s alcohol monopoly was top, with 78%).
The system is questioned in a number of ways. One accusation is simple naivety, with Swedish institutions struggling to comprehend and to adjust to the world operating in very different ways outside of the Nordics. But, there are other darker sides to the story. There is a cadre of the Swedish elite, who went to the same schools, did their business at the same companies and go to the same holiday destinations – from winter skiing at Åre to summers at Båstad. It can be difficult to ruffle feathers amongst one’s social peers. And, not only is the system not particularly meritocratic, as London analysts are noting, it limits the talent pool for leadership positions.
But to return to the positive side of Sweden – its commitment to the liberal, multilateral international agenda. In March, Sweden’s 2030-delegation delivered its report to the Riksdag, noting that while Sweden might be ahead of other countries, it has only delivered a small number of the UNs 17 global goals. Even on climate change, an area where Sweden has proclaimed itself a leader, the country has much to do, as demonstrated by the publication of the first report from the Swedish Climate Policy Council (Klimatpolitiska rådet), an advisory body to the Riksdag, which called loudly for further policy initiatives. Last week, Mundus International attended a seminar at the Stockholm Environment Institute (SEI) featuring Helen Clark, the former New Zealand Prime Minister, who led the United Nations Development Programme between 2009 and 2017. Her views on how to catalyse development can be heard from about the 46 minute mark of this video from SEI. Read more here ➢
Another profession struggling to retain confidence is politicians. Swedes have traditionally had high expectations of their political leaders. During March, three of Sweden’s leading politicians came under fire for various ethical challenges. The most clear-cut case, was of a former Centre party minister, forced to resign over accusations of sexual harassment. A Liberal politician resigned from her party, but not from her job in the Riksdag, when it was revealed that she had been claiming benefits for a place that she rented from her husband. And a Green Party leader and a Liberal MEP both came under fire for business interests conflicting with their political roles.
With the fall of the Islamic State’s final redoubt in Syria, the challenge of what to do about Swedish citizens who travelled to fight for IS came to a head last month. Given their revolutionary political beliefs and terrorist tendencies, the fact that 19 IS returnees were living in Stockholm sent rather a chilling message, especially for former victims such as the Yazidis, now residing in Sweden. The government’s basic plan is to attempt to have Swedish citizens who fought for IS tried in the Middle East. The April edition of the Monthly Policy Review reviews Sweden’s policy options.
Another significant issue for the government is what to do about the housing crisis, which Mundus has written about previously. Recently, a profusion of stories underlined just how significant a problem this was. Not only do Swedes spent a quarter of their total budget on housing, the fifth highest in Europe, but black market racketeers are exploiting the situation, charging exorbitant rents to the newly arrived.
But the big political story of the month was the relentless climb in popularity of the Christian Democrats (KD) under Ebba Busch Thor. The KD is now polling at over 10% in some polls, positioning itself as a softer version of the Sweden Democrats (SD), and creating the potential for a right-wing conservative bloc with the KD, SD and Moderates (M). Busch Thor seemed to open up for that possibility, saying that the party would talk to all Riksdag parties, including SD. Jimmie Åkesson wrote that the decision was “wise and mature”. The Moderates said that they were not prepared to go that far. Annie Lööf (C) declared it a historical mistake. This month’s Monthly Policy Review looks at the shifting of the tectonic plates, as C and L get drawn into the government’s web, and the right wing opposition parties realign themselves.
On the positive side
Away from the evident challenges, Swedes would much rather focus on the positive stories. And March allowed for plenty of celebration of Sweden’s unique benefits. In surveys this month, Sweden topped the global equality index and in preparedness for the global energy transition and ranked highly in health. With so much to celebrate, Sweden ranked fifth in happiness globally.
Such positive messages were not lost on the government, as it proudly touted the country’s successes at the Hannover Messe (see video), where Sweden was the partner country. Sweden, the industrial innovator was the message. There was further positive reinforcement of this message in March, as it was revealed that Sweden’s patents were climbing in EU rankings and with Volvo Cars flurry of announcements about the future of self-driving and electric cars. Gothenburg was ranked the second smartest city in world.
Spotify warrants a paragraph of its own. In just a few years the firm has grown from a domestic innovator to a global powerhouse, with a listing on the New York Stock Exchange. In March it confirmed that it was to expand into India, after winning the right to do so in court. The company flouted its move into podcasting, with a succession of acquisitions of mid-tier podcasting firms. But the most interesting story, was Spotify’s decision to get into a war of words with Apple. Spotify declared Apple a monopolist, with the way it was using the Apple Store. Apple, naturally, fired back
The economy continued to perform. During March, it was reported that Sweden’s economic growth had surprised positively, achieving 2.4% annually in the final quarter of 2018. A number of other indicators continued to do well, including exports and unemployment, even amongst the foreign born, which find it much tougher to get a job. But inflation remained stubbornly low, at just 1.4% in February. Analysts now believe that the Riksbank could be forced to delay the rate rise that it is looking to push through late this year. And, with the repo rate forecast to remain lower for longer, the Krona dived again. With Mediterranean holidays now 10% more expensive than they used to be, its perhaps not a surprise that more Swedes are opting for staycations.
Last but not least
Our final two stories from the Monthly Policy Review look at the position of Sweden’s political parties ahead of the EU elections and what is in store for the reform of labour markets under the January Agreement.