Sweden has long been touted by socialists as an example of their ideas working in practice. Of late, that’s an example they can no longer refer to as the newly elected government works to reduce debt levels by eventually selling off 52 of the 54 companies it owns. The New York Times reports that in the first phase of the sell off, where the govt plans to sell or reduce its shares in six companies, about $21 billion should be raised.
The businesses are a real estate co, a bank, a telecommunications operator, a mortgage co, a spirits manufacturer, and a stock market holding co.
“We think it is wrong that the state is the single largest owner of companies in Sweden,” Odell [minister in charge of the sale] said, pointing to the fact that it has stakes in 54 companies employing 188,000 people. Odell said that the government had begun analyzing the state’s remaining companies — including the flag carrier SAS, the pharmacy monopoly Apoteket, and the gambling monopoly Svernska Spel — to see if there still was any motive to keep them in state hands. Out of the 54, said Odell, only two companies, the energy giant Vattenfall and the mining company LKAB, are definitely ruled out.
I have to wonder why if it is OK on ideological grounds to sell 52 companies, why two would be spared merely because they are in the energy and mining sector. Surely the same principles would apply. The new so called “center-right” coaltion was re-elected in September last year. The planned sell offs continue on from a similar asset sales program the government undertook after the 2006 elections.
Update- A reader has pointed out the referenced source is dated 2007. More recent information indicates the government is still following the same pattern, even after there was some doubt on the sellouts due to it losing its majority in the elections late last year.
The Swedish government earlier this month sold about a third of its stake in Nordea Bank AB (PINK: NRBAY), the Nordic region’s largest lender, recouping $3 billion (19 billion kronor).
Sweden’s debt will narrow to 37.5% of GDP in 2012, less than half the EU average of 83.3%, according to the European Commission (EC). Meanwhile, Sweden’s debt office said in November that it expects national debt to shrink to 29% of GDP by the end of next year. Sweden will post a budget surplus of $2.8 billion (18 billion kronor) this year and a $12 billion (78 billion kronor) surplus in 2012, the debt office said. Next year’s estimate includes income of $5.4 billion (35 billion kronor) from state asset sales, as the government continues to its drive towards privatization.
Sweden is one of the few countries to increase its workforce during the financial crisis, adding 100,000 people. Sweden’s unadjusted jobless rate was 8.2% in January, as the number of unemployed workers fell by 44,000 year-over-year to 408,000.