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The Nordea management is determined to go ahead with its plans to form a European Company. However, there are still a number of obstacles that are delaying the final decision. One of these is the structure of the deposit guarantee schemes.
“But now it looks as though a solution is in sight. I have no reason to doubt that Nordea will become a European Company,” says Peter Schütze, the member of Nordea’s Group Executive Management who has responsibility for this issue.
Already in 2003, the Nordea Board decided in principle to transform the bank into a European Company.
Why does Nordea want to become a European Company?
“The European Company concept is well in line with the type of company that we want to be. We do business in several countries and are thus subject to the legislation and the supervisory authorities of different countries. This is a heavy burden to bear and it takes up a lot of time that we could devote to other things. We would like to be able to run our operations more efficiently.”
What are the major advantages of becoming a European company?
“It makes things less complicated. We will become a company with branches and will work under one and the same regulatory framework. This will give us a less awkward structure.”
Do you see any disadvantages?
“Not really. Apart from the arduous journey we have ahead of us, but that’s another story.”
However, before the Nordea management can make the final decision that will make the bank a European Company, the EU regulations governing a number of areas must be changed. The most important of these concerns deposit guarantees.
The current legislation says that an SE company’s homeland (in this case Sweden) must take over from the national systems for deposit guarantees. This would distort competition as Nordea would be unable to transfer the millions previously paid in from the other Nordic countries.
A Nordea delegation headed by Group CEO Lars G Nordström recently visited Brussels to try to hasten a solution. Peter Schütze says that the visit was a success.
“We managed to get the message across that this is not just a matter for Nordea but for the entire EU. The issue is now on the European Commission’s agenda for 2005 and my impression is that there is a positive attitude to finding a temporary solution during the spring. It will probably take several years before a long-term solution is reached.”
Another issue that must be resolved concerns the VAT regulations. Schütze believes that it may be easier to find a solution here as internal services within the cross-border operations will be exempt from VAT if a European Company is formed.
When do you think that Nordea will be able to make the final decision on becoming a European Company?
“I can’t give you an exact date. The Board will discuss the issue again in the spring of 2005.”
So what is most likely – that Nordea will go ahead or not?
“We have clearly stated our intention. The question marks we have raised now seem to be approaching a solution. I have no reason to doubt that Nordea will become a European Company.”
What’s your view of the regulations on employee influence?
“I think that it is very fair that the trade unions are involved. We are ready to begin negotiations as soon as the final decision to go ahead is made.”
What will your position be in these negotiations?
“We will present our position to those we negotiate with. In our experience, co-operation with the trade unions in the four Nordic countries has worked very well. We hope that this will continue and that we will be able to find solutions that also suit those countries where we have many fewer employees.”
The law stipulates that the degree of employee influence must not be reduced compared to the situation as it stands today. What’s your view on this?
“We have no problem with that. As I understand it, there are strict regulations governing the conduct of negotiations.”
Do you believe that all the 11 European countries in which Nordea has operations will be included in the European Company?
“This hasn’t been decided yet either. The main thing for us is to include the four Nordic countries, but the Baltic countries and Poland will probably also be included. The bank in Luxemburg is a subsidiary today and may continue to be so, but we’ll see. There are many possibilities.”
Bengt Rolfer
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