Mundus Brief: May 2019

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

Greta vs. Janne

At times it seems as if everyone in the world has heard of Greta Thunberg. Nine months ago she was just a schoolgirl on a lonely sit-in on the steps of the Riksdag. Now, she’s rubs shoulders with Arnie “Terminator” Schwarzenegger, the Pope and more humble humans, such as EU parliamentarians. Very few people would recognise the name of Janne Berglund, the 69 year-old from Borås. But, quite a few more, most of them Swedes, would have heard of the social movement he founded, Bensinupproret (“the petrol rebellion”). Nonetheless, we think that it’s worth profiling the role that Janne has taken, because, until now, the cause he represents has been lacking from the debate. Also, it’s our lead story in this month’s edition of the Monthly Policy Review, where we argue against the temptation is to compare Bensinupproret with the Yellow Vests. The Swedish version of a rebellion is a much quieter form of protest … for the moment.

Mundus covered Greta and her cause in our March Brief. Since then, her star has burned even brighter, if that could be possible. In May, Mundus News covered that she was to have a book of her speeches published, and she was to TV documentary. A new term entered the lexicon –  with the swing in votes towards green parties in the EU elections labelled the “Greta effect”. She also met Arnie and was praised by the Dalai Lama.

So, back to Janne. He says that the purpose of his petrol rebellion is to raise public opinion. “Through this, we want to put pressure on our politicians so that the tax on fuel is lowered … What one drive’s today is necessary travel … to and from work and kindergarten and so on. So I do not feel that one would drive more if the petrol price is lowered.” Like the Yellow Vests, he describes the group as politically independent, with the Facebook page saying that posts made must be relevant to the group and that they remove posts that attack someone because of skin colour, ethnicity and national origin.

So, where will this go next? Will Sweden’s political class back down, as might be indicated by the immediate reduction of the indexation of fuel tax? At this stage, it looks unlikely, because even if Bensinupproret has hundreds of thousands of Facebook members, that is only a few per cent of Swedes. Meanwhile the majority of Swedes proclaim the climate as one of their biggest concerns. Furthermore, Bensinupproret’s demonstration in Stockholm barely gathered 200 people.

Swedes would rather interpret the movement as a city vs country issue. As Peder Blohm Bokenhielm, another of the Facebook group’s leaders says, most of their members couldn’t make the demonstration, because they live hundreds of kilometres from Stockholm. And, it is generally accepted, with some sympathy by urban Swedes, that the countryside has genuine concerns. Not only are the distances greater, but there are few options to the car, and the countryside lacks the economic opportunities available to urban residents. So, perhaps a compromise will be reached, where a package of reforms will be put in place for rural areas, leaving the bulk of the fuel taxes in place.

If one reflects more broadly, Bensinupproret is just the most visible face of a much bigger challenge. Sweden has committed to becoming the first fossil free welfare state, and given itself targets that need to be solved sooner rather than later. But the political class has done very little to prepare the population for reforms that are not only self-inflicted, but are also going to have a big effect on the way that people lead their lives. And so Bensinupproret should really be seen as the tip of the iceberg, as ordinary Swedes discover what it means to be fossil free. The Greens are at least honest, with their newly elected spokesperson, giving the country the advice that the best way to avoid petrol “price shocks” was to become independent of oil and to run vehicles on Swedish biofuels and electricity. But, the Social Democrats and Moderates are more cautious with their rhetoric, seeming to pretend that the changes only require small things, like a hundred kronor flight tax. So, when Pågen, a popular bread manufacturer. declares that it can’t expand its plant to provide Swedes with more of its tasty products, because it can’t get enough electricity to the factory, the population struggles to understand what is going wrong.

This brings us to our second feature in the Monthly Policy Review – Sweden’s Energy Agreement and nuclear energy policy. This issue seemed to be decided years ago, when 5 parties agreed to phase out Sweden’s nuclear. But now, as the country’s electricity grid grinds towards a holt, the Moderates and Christian Democrats have changed their mind about what they signed up for. If carbon-free electricity is required, then they say that Sweden needs to keep its nuclear plants.

As we highlighted in April, Svenska kraftnät, the electricity operator has thrown its hands in the air, saying it was unable to resolve Swedish electricity consumption on its own. Industry is also unimpressed by the new political agenda. The CEO of one of the nuclear plants declared “I love running nuclear power, but that aside I cannot see a viable course to continue running [it]”.

Away from politics, those parts of the Swedish economy that could continue to reform, did so. Preem, a large Swedish oil refiner and retailer continued the next stage of its transition towards lower carbon by progressing with a major upgrade to its refinery. But rather perversely, even if the investment is to make greener fuel, the expansion will involve the refinery spewing out more carbon dioxide, raising green’s eyebrows. Volvo Cars also signed a long-term agreement for battery supply and Northvolt received more finance towards its futuristic battery factory. SAS and Airbus decided that they would conduct a study looking into preparations for electric-powered flight.

EU elections

Even if climate change is the defining issue of our generation, it was not the defining issue when Swedes came to vote in the EU elections. The election debates lacked a clear focus. The climate issue was defused, by essentially all parties bar the SD taking a pro-climate stance. This issue of Europe was largely moot too, as parties generally campaigned for the status quo, except for talk of punishing states with undemocratic tendencies. SD decided not to campaign for Swexit, leaving L as the party with the most distinctive EU policy. It argued for more Europe, and nearly lost its only seat. Oddly, if there was any defining issue, it turned out to be abortion. KD managed to throw away an outstanding position when their lead candidate, Adaktusson, had his voting position on abortion in the European parliament exposed by Dagens Nyheter, just days before the poll. KD ended up with 8.6% of the vote, when it had been receiving up to 13% support in surveys two weeks before the election. The slump in support was confirmed by another opinion poll published in June, showing KD receiving just 7.4%.

Subscribers may read our full election analysis in the Monthly Policy Review, including a brief introduction to all incoming Swedish MEPs.

Monthly Policy Review

Other political news

There were three other political issues of consequence in June. Most importantly was defence, with the Defence Commission tabling its report into Sweden’s future military needs. All parties agreed that given the riskier geopolitical situation, Sweden needed to build up its defensive capability. So far, so good. But where the talks broke down was over how to finance it. The opposition parties wanted to approve budget increases, but the government argued that given the already stretched budget, a discussion about financial prioritisation was required first.

The second issue of substance was over returning ISIS fighters. Sweden’s Justice Minister, Michael Damberg has presented a proposal to peer nations to set up a tribunal to administer justice in the Middle East. The proposal is being given serious consideration by the UK, France and the Netherlands.

A third issue, with domestic rather than international implications, was the attempt to bring down the Minister for Social Security, Annika Strandhäll (S), over her removal of the former Director General of the Social Insurance Agency. A short but fierce fight ended when the Centre Party did not support the other right wing parties efforts. Strändhäll remained, and performed a small mea culpa, acknowledging that the dismissal could have been better administered.

And finally, the Liberals are in the midst of a leadership transition, with two candidates, Nyamko Sabuni and Erik Ullenhag competing for Jan Björklund’s position. Read all about it in the next edition of the Monthly Policy Review.

The economy bumps along, but not as bad as feared

A cloud of pessimism lurks over the economy. Consumers feel that the good times are behind them, with the Economic Tendency Indicator falling from 102.5 in April to 99.8 in May. CFOs are also less optimistic than any time in the last 3 years. But, when the debate appeared to have hit peak gloom, the GDP growth rate for the first quarter surprised to the upside. Economists went in search for a reason, and declared that Sweden was saved by its weak exchange rate, which facilitated an impressive 3.2% growth of services exports. As we have reported in the past, the exchange rate is a bone of contention amongst macro-economists. But, for the moment, the Krona’s weakest position since the Financial Crisis is supporting the economy.

Business news

Swedbank must be very relieved at having gotten itself off the front pages, which made for less interesting business news in May. The biggest story of the month was the strike by SAS pilots, which affected the airlines profitability in April and May, and will result in lower profits going forward, with the company forced to agree to significant pay rises.

Other organisations also going through troubling times include institutions such as PostNord and Karolinska Hospital which announced that it was laying off 500 people. IKEA too announced that it was reducing its workforce by 7,500 globally, of which 650 positions were to be from Sweden. But the company prefers to call it a repositioning rather than a downsizing. Longer-term it forecasts jobs growth as it moves towards e-commerce and urban concept stores.

That’s it for the moment from Mundus Brief. With the temperatures rising summer must be upon us. Mundus Brief will take a break next month, but we’ll be back again in August. 
Vi önskar er en trevlig och varm sommarsemester!

Photo: AFP / Lehtikuva