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Dec 19, 2014

Swedish central bank picks academic to board, limited policy impact seen

STOCKHOLM, Dec 19 (Reuters) – Sweden’s central bank said on
Friday it has picked Uppsala University professor Henry Ohlsson
to replace policy board member Karolina Ekholm, in a move
analysts said was unlikely to affect the bank’s current policy.

The Riksbank has come under fierce criticism in recent years
for cutting rates too slowly to address persistently low
inflation, including in June from the Economic Council of
Swedish Industry of which Ohlsson was chairman.

Dec 16, 2014

Riksbank keeps key Swedish rate at zero, readies new expansionary measures

STOCKHOLM, Dec 16 (Reuters) – Sweden’s central bank left its
key interest rate unchanged at zero percent on Tuesday,
signalling its worry over persistently low inflation by pushing
back forecasts for future rate increases and saying it was ready
to act with other measures if needed.

The central bank surprised markets in October by cutting
rates to zero from 0.25 percent, lower even than at the height
of the financial crisis in 2008-9.

Dec 12, 2014

Lack of ideas, leadership in Swedish politics may benefit far right

STOCKHOLM (Reuters) – Sweden’s mainstream parties head into March’s snap election unloved by voters and short on seasoned leadership, raising the risk the far-right will increase its support and be able to force a shift in generous immigration policies.

Center-left Prime Minister Stefan Lofven’s need to call a new election two months into office underlines his weakness. His likely rival for the top political post – Moderate party economic spokeswoman Anna Kinberg Batra – will not even head her own party until January.

Dec 4, 2014

Swedish far-right makes big gamble to shed pariah status

STOCKHOLM (Reuters) – Sweden’s far-right is gambling its political future in pitching the country into snap elections, calculating disaffection with established parties and fears over immigration can further its meteoric rise from a pariah-like obscurity to mainstream power.

But voters may yet punish the Sweden Democrats, who want to cut asylum seekers by 90 percent, for tipping the balance in a vote over the budget on Wednesday and forcing a Social Democrat-Green coalition to call polls after only 2 months. Turmoil is an alien spectacle in Swedish political culture.

Dec 3, 2014

Losing grip on power, Swedish government faces budget defeat

STOCKHOLM (Reuters) – Sweden’s minority government looked certain to lose a budget vote on Wednesday as the anti-immigration Sweden Democrats flexed their political muscles – a move that may force Prime Minister Stefan Lofven to call a snap election.

The far-right group has held the balance of power since September’s election and plan vote with the main opposition bloc on the budget.

Nov 27, 2014

After zero rates, Sweden ponders next steps to avoid deflation

STOCKHOLM, Nov 27 (Reuters) – What should a central bank do
next when it already has zero interest rates and arguably still
faces the threat of Japanese-style deflation? If it’s the
Swedish Riksbank, it should keep cutting, and do so soon, says
Lars Svensson.

Svensson no longer has a say; he quit as a deputy Riksbank
governor last year after failing to persuade fellow board
members to cut rates aggressively. Last month, they heeded his
advice, lowering the repo rate to 0 percent and pushing back the
official forecast for when the Riksbank will start tightening
monetary policy again to mid-2016.

Nov 9, 2014

Sweden grapples with massive household debt as rates hit zero

STOCKHOLM, Nov 9 (Reuters) – Sweden’s new centre-left
government and its financial authorities are under huge pressure
when they meet on Tuesday to tackle a mountain of household debt
that is casting a long shadow over one of Europe’s few economic
bright spots.

Having slashed rates to zero to fight the risk of deflation,
top Swedish officials are now in a quandary over how to rein in
borrowing and house price rises without sending the real estate
market into a downward spiral.

Oct 30, 2014

Sweden recognizes Palestinian state, hopes will revive peace process

STOCKHOLM (Reuters) – The Swedish government officially recognized the state of Palestine on Thursday, the first Western European country to do so, reflecting growing international exasperation over the moribund Israeli-Palestinian peace process.

Swedish Foreign Minister Margot Wallstrom told reporters her government hoped it would bring a new dynamic to the situation.

Oct 29, 2014

Riksbank has no safety margin as Sweden flirts with deflation

STOCKHOLM, Oct 29 (Reuters) – Sweden’s central bank believes
it can avoid Japan’s deflationary fate after cutting interest
rates to zero; critics say it no longer has any safety margin
should a shock hit the economy, and even compare its record with
U.S. policy mistakes of the 1930s.

Defying conventional economics, Sweden is enjoying one of
the healthiest growth rates in Europe even though the consumer
price index has been flat or fallen in every month but one this
year.

Oct 28, 2014

Nordic, Baltic states face ‘new normal’ of Russian military threat

OSLO/STOCKHOLM (Reuters) – Fears of Russia re-asserting its Cold War dominance in the Baltic Sea are forcing countries there to re-think their defenses, prioritizing military spending at home and reducing participation in far-flung U.N. or U.S.-led missions.

Sweden’s fruitless search for a submarine — dubbed by locals “The Hunt for Reds in October” — and Russian violations of airspace are seen as elements of what one defense minister called a ‘hybrid warfare’, where fear and propaganda are deployed to keep countries on their toes.