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Warning over ‘long-term’ Swedish export slump

The Confederation of Swedish Enterprise (Svenskt Näringsliv) has gone out guns blazing, criticizing politicians for not facing up to the challenges of "a lost year for Swedish exports" in 2012.

Warning over 'long-term' Swedish export slump

“Since the finance and debt crisis began, Sweden’s share of exports in relation to GDP has fallen nearly 5 percent,” confederation economist Björn Lindgren wrote in a commentary published on Monday.

“Only Luxembourg (which still has the highest share of all member states), and Finland (whose powerhouse Nokia has experienced difficulties) have performed worse.

“It is time for a wake up call to our national policymakers.”

In 2012, the overall value of Swedish exports dropped by 3.5 percent, resulting in a 1.2 percent decline in exports as a share of GDP.

“Moreover, these statistics show that Sweden is at best a mediocre exporter, and it is time for greater political awareness,” he wrote.

“This also indicates a paradigm shift where exports are no longer the growth driver for Sweden as they have been for 15 years.”

Lindgren said Sweden’s worsening export sector came as a result of many Swedish businesses moving production abroad, warning the decline was a “long-term trend”.

He went on to argue that because Swedish exports depend to a lesser extent on the crisis-ravaged countries in southern European, the drop in exports cannot be pegged solely to the euro crisis although the financial downturn was clearly taking its toll.

“From the early 1990s to 2007, when the financial crisis exploded, Sweden had a strong upward trend in the proportion of exports in relation to GDP. But now this trend has been broken and reversed to the current declining trend,” Lindgren explained.

In keeping with its pro-free market political heritage, the industry confederation advocated a review of labour costs in Sweden, while also discussing the impact of the strong Swedish krona, a topic which set the finance minister and the shadow finance minister on collision course as late as last week. Lindgren also urged corporate tax reform.

“Recently published data by the Statistisches Bundesamt [in Germany] show that labour costs in Sweden are higher than any other EU country,” Lindgren wrote.

“These costs are €42 per working hour in Sweden, which is €11 higher than in Germany and €14 than the euro area average.”

Lindgren noted that there was no sign that the Swedish krona would lose its strong standing on currency exchange markets any time soon.

“Which means that Sweden must be ready to improve its competitiveness even with these prerequisites,” he argued.

He further welcomed some recent changes to corporate taxes but said other countries had matched the reforms.

“The Swedish government must therefore continue to implement new measures that improve market conditions for Swedish companies that invest and create operations in Sweden,” he argued

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BUSINESS

France’s EDF hails €10billion profit, despite huge UK nuclear charge

French energy giant EDF has unveiled net profit of €10billion and cut its massive debt by increasing nuclear production after problems forced some plants offline.

France's EDF hails €10billion profit, despite huge UK nuclear charge

EDF hailed an “exceptional” year after its loss of €17.9billion in 2022.

Sales slipped 2.6 percent to €139.7billion , but the group managed to slice debt by €10billion euros to €54.4billion.

EDF said however that it had booked a €12.9 billion depreciation linked to difficulties at its Hinkley Point nuclear plant in Britain.

The charge includes €11.2 billion for Hinkley Point assets and €1.7billion at its British subsidiary, EDF Energy, the group explained.

EDF announced last month a fresh delay and additional costs for the giant project hit by repeated cost overruns.

“The year was marked by many events, in particular by the recovery of production and the company’s mobilisation around production recovery,” CEO Luc Remont told reporters.

EDF put its strong showing down to a strong operational performance, notably a significant increase in nuclear generation in France at a time of historically high prices.

That followed a drop in nuclear output in France in 2022. The group had to deal with stress corrosion problems at some reactors while also facing government orders to limit price rises.

The French reactors last year produced around 320.4 TWh, in the upper range of expectations.

Nuclear production had slid back in 2022 to 279 TWh, its lowest level in three decades, because of the corrosion problems and maintenance changes after
the Covid-19 pandemic.

Hinkley Point C is one of a small number of European Pressurised Reactors (EPRs) worldwide, an EDF-led design that has been plagued by cost overruns
running into billions of euros and years of construction delays.

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