Spring budget warns of tough times ahead

The Swedish government is set to allocate funds to expand employment opportunities for the the young and the unemployed in its spring budget.

Spring budget warns of tough times ahead

As the parliament prepares to debate the spring budget proposal on Wednesday finance minister Anders Borg emphasized the precarious financial situation and warned of tough times ahead.

“Probably the worst (situation) in the world economy since the depression,” Borg said to news agency TT on Wednesday.

“The government’s job in this situation is to safeguard the public finances and core welfare services as well to hinder the advance of unemployment,” he continued.

With a recent forecast indicating that unemployment is set to top 11.7 percent in 2011 the government is set to present a budget focused on helping the unemployed and young into work.

The public employment agency’s (Arbetsförmedlingen) costs are expected to rise from 16 billion kronor ($1.95 billion) in 2008 to 42 billion in 2011.

The government will therefore increase provisions in the spring budget for unemployment insurance payments by 10 billion kronor for 2009 and allocate an extra 781 million to the jobs guarantee scheme.

“We are now going to conduct a significant update of labour-market measures. It is a question of 45-95 billion kronor over the coming years,” Anders Borg said.

The number of places in the job guarantee program is expected to expand by 100,000 on the government’s projection in the autumn budget.

By 2011 around 250,000 Swedes are expected to be engaged in various employment training programs, up from an average 85,000 in 2008.

The government proposals have been roundly criticized by the opposition Social Democrats.

“What the government is now doing is hiding 220,000 people in purely passive programs, those that are typically called job and development guarantees. It is an unfortunate strategy as it excludes people and humiliates people,” Thomas Östros, the Social Democrat finance policy spokesperson said on Wednesday.

Anders Borg responded that sound state finances must come first and refused to get into a bidding war with the opposition. He underlined that the budget initiatives were not simply an attempt to massage the statistics.

Borg underlined that the crisis is not over and new surprises could be around the corner. He did not rule out raising taxes to shore up public finances but underlined that it is not something that is currently under consideration.

The government’s macro-economic forecasts were presented in the beginning of April and the figures presented in the spring budget were in line with prior projections.

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Sweden boosts spending on civil defence in spring budget

Sweden is to channel a further 800 million kronor to local government and other organisations to bolster Sweden's civil defence capabilities, the country's finance minister has announced.

Sweden boosts spending on civil defence in spring budget

The new funding, which will go to municipalities, regional government, and other organisations, was announced of part of the country’s spring budget, announced on Tuesday. 

“This will strengthen our ability to resist in both war and peace,” Sweden’s finance minister, Mikael Damberg, said in a press conference. “If the worst happens, it’s important that there is physical protection for the population.” 

The government is channelling 91m kronor towards renovating Sweden’s 65,000 bomb shelters, and will also fund the repair the country’s network of emergency sirens, known as Hesa Fredrik, or Hoarse Fredrik, many of which are currently out of order. 

A bomb shelter in Stockholm. Sweden’s government is spending 800m kronor in its spring budget to boost civil defence. Photo: Anders Wiklund/ TT

Sweden’s Social Democrats are currently ruling on the alternative budget put together by the right-wing opposition, making this spring budget, which makes changes to the autumn budget, unusually important. 

The budget includes extra spending of some 31.4 billion kronor (€299m), with 500m kronor going to extra spending on healthcare,  and 10.3 billion kronor going towards supporting Ukrainian refugees, of which nine billion will come from the aid budget. 

The spring budget also includes the so called “pension guarantee bonus”, or garantitillägg, which will see four billion kronor (€390m) going to those with the lowest pensions. 

The bonus, which was the price the Left Party demanded for letting Magdalena Andersson take her place as prime minister, risks being voted down by the right-wing parties in the parliament.