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Saab and Brazil postpone Gripen finances

A miniature of what the Swedish-Brazilian Saab Gripen NG fighter will look like, if the plans go ahead.
A miniature of what the Swedish-Brazilian Saab Gripen NG fighter will look like, if plans go ahead. Photo: Agência Brasil

Worlds collide when the masters of spontaneity are aiming to do business with the center of Nordic Noir. At the very last minute the Brazilian Defense Ministry and the Swedish company Saab agreed to postpone the signing of the contract that will define the financial details for Brazil’s buying Swedish Gripen fighters.

The deadline for signing the contract was Monday July 6th 2015, but it is now to be signed in late October instead. The adjourning required President Dilma Rousseff to call her Swedish colleague, Prime Minister Stefan Löfven, and beg for time. However, the compromise comes with a catch. Until late October, the contract and its terms are to be approved by the Brazilian National Congress.

The Brazilian Air Force Commander, Nivaldo Rossato, and Saab executives met with the Brazilian Defense Minister, Jaques Wagner, to come to an agreement. Wagner claimed that there is not possibility of Brazil backing out of purchasing the Gripen fighters. He promised that an effort will be made to determine the financial details.

Brazil bargaining

The Brazilian Air Force signed a contract in October last year to buy the Swedish fighters to a cost of US$ 5,4 billion. However, Brazil is determined to renegotiate the interest that was agreed upon in the contract, since the economy in the country is suffering a recession.

The Brazilian Minister of Finance, Joaquim Levy, claims that a renegotiation of the interests will save the country over US$ 300 million in 25 years. Furthermore, the Minister wants to use the renegotiated Saab contract as a model to revise other international contracts that have been signed by other Ministries. Since the interests have fallen in Europe, the Brazilians see an opportunity to improve their stakes. In an informal ambient this kind of behavior is called “jeitinho”, a Brazilian way of rearranging a done deal so that the benefits increase.

On the opposite side of the globe, the Swedes are great fans of rules and efficiency, tending to arrive at least five minutes early to meetings. Behind the scenes there are claims that the Swedes have argued that a renegotiation of the interest is a violation towards the OECD’s Export Credit Arrangement. A breach of the arrangement could lead to reprisals from the World Trade Organization (WTO). Accordingly, the Swedes insist that the interest was defined the day the contract was signed in 2014.

In Brazil’s 2015 budget, R$ 1 billion (approximately US$ 320 million) have been reserved for the buying of the Swedish jets. However, since a long-term plan to pay off the planes is being structured, the Brazilians do not expect to apply all of the money that has been set aside.

Economy collapsing

With an increasingly tense domestic situation ignited by the Petrobras corruption scandal which has generated demands to impeach President Rousseff and inflation hitting 8,89% it is alarming that Brazil chooses to suspend the Saab contract. Not to mention the financial blow after the most expensive FIFA World Cup ever and the Olympics coming up next year, which are also bleeding money and are as late as the preparations for the World Cup.

To samba your way around your own country, wasting your proper means is one thing. But when you ask a Gringo for a dance, you cannot expect them to fall for you charms. Certainly not in a world concerned enough as it is with Grexit and the future of Europe.

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Democratic Sweden collapsing

Exit to the left: Red-Green. On top: Sweden Democrats. Hungry underdogs looking up: the Blue Alliance.
Exit to the left: Red-Green. On top: Sweden Democrats. Hungry underdogs: the Blue Alliance.

New elections have been announced in Sweden today. The reason is that the right-wing populist party, the Sweden Democrats, have voted on the opposition’s budget instead of the new minority government’s. The newly announced Prime Minister Stefan Löfven chose to renounce from his new post and let the people of Sweden decide their future yet again at the urns.

Sweden has until today been seen as an example for Democracy. But today the Democratic example has seen its parliament collapse. The budget proposed for 2015 by the Social Democrats, the new leading party of the country, was not approved because the Sweden Democrats refuse it. They consider it to focus more money on immigration than the extreme right wing-party desires.

Elections were held in Sweden in mid-September 2014. The Social Democratic Party received the largest number of votes together with its partner the Environmental Party. The Swedish people voted for the coalition that had been promised between the Reds and the Environmental Party, leaving their tradtional partner the Left Party to simply support their politics but not be an offical partner in government.

The Sweden Democrats got less than 13 percent of the votes in the election, but in spite of that they have managed to rearrange the entire political map of Sweden. Now it is up to all parties to prepare for a new round that will settle the future of the country. The Sweden Democrats have promised to vote against any budget that is opposite to their demands for lowered costs on immigration.

 

The right-wing populist parties support among voters in Scandinavia: Sweden Democrats 12,9%, Norway's Fremskrittspartiet 16,3% and Høyre 26,8%, Finland's Sannfinländarna 19,0% and Denmark's Dansk Folkeparti 12,3%.
The right-wing populist parties support among voters in Scandinavia: Sweden Democrats 12,9%, Norway’s Fremskrittspartiet 16,3% and Høyre 26,8%, Finland’s Sannfinländarna 19,0% and Denmark’s Dansk Folkeparti 12,3%.

Right-wing populist power in Scandinavia

In Sweden’s neighboring countries the right-wing populist parties have already gained large influence. In Sweden, their confirmation of power comes with a boom. The crouching Prime Minister complained on the Sweden Democrats lack of morals at knowing their plans a day before the voting: “This is a breach against the code of conduct at budget negotiations”.

But the Sweden Democrats do not care about anybody else’s morals. They have their objectives and will not back. The Rightist Alliance, right-wing and liberal parties, led by the Moderates say they welcome the challenge to see who will win the people’s confidence after a failed democratic project.

The Alliance has led Sweden the past eight years but were voted away this year. The government has been very successful in maintaining Sweden economically stable even though a crisis is affecting the rest of Europe. But they have been increasingly criticized for worsening key parts of the Swedish society such as Health and Education.

A reelection has not been held in Sweden since 1958. The new elections will be held March 22nd 2015. This is a historic moment that the country is experiencing, where the new Prime Minister has to continue ruling the country on the opposition’s budget. From the new year Red will be Blue.

 

 The Daily Show report on how Sweden used to be seen before today

The last eight years of Alliance rule Sweden has moved further and further away from its “Communist Sweden” days. What color the country prefers after a quarter of a year of contrariwise rule is yet to be discovered: Red, Blue or Brown.