Ringholm dishes out budget bounty

Nothing makes a finance minister more popular than increasing spending, particularly if he’s a social democrat. But the money has to come from somewhere, and when Bosse Ringholm unveiled his budget this week, critics were ready to pounce. And the appointment of a new party secretary for the Social Democrats exposed divisions over Europe, and left the opposition salivating.

Ringholm said that his package would raise benefits for children and pensioners. To pay for it he announced increased taxes on fuel and electricity, reported Göteborgs Posten. Measures were announced to give more money to local councils to create jobs, and there were reductions in inheritance tax, gift tax and wealth tax.

According to Ringholm, the budget would combine with Sweden’s growing economy to “help to create thousands of new jobs, and help avoid local authority job losses.”

The view of the conservative press was certainly sceptical. Svenska Dagbladet cited a leading think-tank, which said that the minister’s plans were unfinanced.

“A lot of this is paid for by borrowing. The national debt will increase this year and in 2005 and 2006,” said Ingemar Hansson from the National Institute for Economic Research.

The Swedish armed forces were one of the obvious losers. Their budget, which has been subjected to a series of cuts over the past decade, was cut by a further 600 million crowns. Still, this wasn’t enough to satisfy Ingemar Hansson that Ringholm had balanced the books. He told SvD that the spending plans would leave no money for unforeseen requirements, and warned that the stimulation of the economy by all the government spending would mean higher interest rates.

The budget faced criticism both from the left and the right, with Per Winberg, the leader of the transport union and a social democrat, criticizing Ringholm for raising fuel tax. Winberg, whose union describes itself on its website as ‘Sweden’s most militant’, said that the Social Democrats had “given in to the Greens.”

If the budget exposed splits in the Social Democratic Party, the naming of culture minister Marita Ulvskog as party secretary threatened to cause more division. Ulvskog, a veteran left-winger and Eurosceptic, was a surprise choice, according to Expressen. The Moderate Party’s Sven Otto Littorin told the paper that by putting Ulvskog in such a prominent position the Social Democrats had “made the choice between the two potential governments very clear.”

While some social democrats welcomed the appointment, saying it would help the party capitalize on anti-EU sentiment, others were less keen, with ex-MEP Göran Färm saying he feared it would “give a clear picture of a divided party.”

Göran Persson, the prime minister, told a press conference that he was pleased that Ulvskog would be responsible for his re-election campaign in 2006.

“I wanted a woman,” he said, before rushing to clarify that Ulvskog’s other attributes as “an experienced and respected debater” would also be valuable.

Despite the divisiveness of her views, the woman herself was not content to be diplomatic. At the press conference she exposed divisions with pro-European Persson, and laid into the EU. “The EU is a project of the right: there’s a conservative majority in the commission, the council of ministers and the EU parliament.”

The Swedish debate on the EU constitution might just have got more interesting.

Sources: Svenska Dagbladet, Göteborgs Posten