Budget marks return to 1990s social democracy

UPDATED: Prime Minister Stefan Löfven's centre-left coalition government's spring budget spells a return to the traditional social democratic welfare politics Sweden is known for abroad.

Budget marks return to 1990s social democracy
Prime Minister Stefan Löfven in parliament on Wednesday. Photo: TT

Sweden's Finance Minister Magdalena Andersson presented the Social Democrat-Green coalition government's budget proposal at a press conference on Wednesday morning, laying the focus on jobs, education, sustainable development and welfare politics. No surprises there, Social Democratic politics professor Ulf Bjereld, based at Gothenburg University, told The Local after the announcement.

“There were not really any surprises there. Nowadays most of the proposals get revealed one at a time in advance to get maximum media coverage, so all the relevant points were already known before today. Possibly it came as a bit of a surprise that the government has boosted its growth forecast, but that's a minor detail,” he said.

The government estimates that Sweden's GDP will grow by 2.6 percent in 2015, up from its previous prognosis of 2.4 in January earlier this year. Although unemployment is expected to remain high, the government has revised its January forecast from 7.7 percent to 7.5 percent.

The supplementary spring budget, which is designed to reverse some of the policies the Löfven government pledged to follow in its controversial December Agreement with Sweden's centre-right Alliance parties, includes reforms amounting to eight billion kronor ($908 million).

“If you want to summarize it, it's a fairly traditional Social Democratic – and of course now Green as well – budget where you care for the welfare, by raising for example the cap on unemployment benefits and employing more workers in the elderly care sector. It's a symbolic 'reset budget' to bring back the social safety net of the last century,” said Bjereld.

Some of the more expensive reforms are more workers in the elderly care sector (one billion kronor), creating 6,500 new places in higher education and adult training (610 million kronor), railway maintenance (620 million kronor) and raised unemployment benefits (880 million kronor). The budget also includes raised child support to 1 573 kronor per child.

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But the supplementary spring budget was sharply criticized by most of Sweden's opposition parties on Wednesday.

“The correct headline for the budget that has today been put to parliament is a 'betrayal of jobs',” the centre-right Liberal Party's financial spokesman Erik Ullenhag told reporters.

“Instead of structural reforms we're seeing historically great tax rises,” he said and added that the raised taxes are the highest in Sweden in 20 years' time.

Christian Democrat politician James Forssmed described the new financial plan as a "breach of faith budget".

"The government policy will slow the growth of new jobs," added Ulf Krister Andersson from former Prime Minister Fredrik Reinfeldt's Moderate Party.

The nationalist Sweden Democrats and the Centre Party were also quick to voice their concerns.

The Liberal Party's Erik Ullenhag comments the government's budget. Photo: Pontus Lundahl / TT

But the Left Party largely welcomed the government's budget proposal.

“It feels like Borg's [finance minister during the previous Alliance government] bitterly cold winter is finally over. A state budget should mirror the kind of society we want. That's why it's been so important to us to have more resources put into welfare,” said financial spokeswoman Ulla Andersson.

Löfven's Social Democrats formed a coalition with Sweden's Green Party after the general election in September 2014. But a political crisis was sparked when a budget put forward by the Alliance to rival the new government's (as is customary in Swedish politics) ended up getting more support than the coalition's offering, because it was also backed by the nationalist Sweden Democrats, who are kingmakers in the Swedish parliament.

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Both the centre-right Alliance parties, the Social Democrats and the Greens struck a deal to ensure a similar problem would not happen again, titled the December Agreement. This included deciding that the current coalition should follow the Alliance's financial plan until it is free to present its own budget again next autumn, but also that the main opposition parties will let the government's budget through in the future.

The four Alliance parties were on Wednesday set to present their own, separate budget proposals instead of putting forward a common one, meaning that even if all parties vote for their own plans, the government's budget will still achieve a majority in parliament.

“The supplementary budget will go through, but the measures are still very small compared to the autumn budget, which will apply until the government can put forward its own budget next autumn. What's interesting is that it has marked the direction it wants to take in coming years,” said Bjereld.


PM: Social Democrats could decide on Nato on May 15th

Sweden's Prime Minister has said that her party has brought forward the date for a decision on Nato membership by ten days, meaning a decision could be in place before a state visit by Finland's president in mid-May.

PM: Social Democrats could decide on Nato on May 15th

The decision had previously been tabled for a meeting of the party board on May 24th, but could now be taken at an extra meeting of the Social Democrats ruling committee on May 15th, Magdalena Andersson said at a press conference on Thursday. 

“We will of course discuss the issue and then we can see if we feel ready to take a decision or not,” she said at a Ukraine donors’ conference in Warsaw. 

She said that the security guarantees Sweden has received from the US and Germany for the period between a possible application and full Nato membership were significant. 

“It means a lot if Sweden chooses to send in an application, that we will be safer during the period up until we become members than we otherwise would be,” she said. 

“The party committee can take a decision then,” Party secretary Tobias Baudin he told Sweden’s TT newswire of the May 15th meeting. 

The meeting will come just two days after the Swedish government’s ‘security policy analysis group’, which includes representatives from all political parties, is due to submit its own reassessment of Sweden’s security situation. 

“It depends on what the security policy dialogue shows,” Baudin says of the decision. “Right now meetings in party districts are going at full pace.” 

The May 15th meeting will take place on the Sunday before the week when Finland’s Iltalehti and Sweden’s Expressen newspaper last month reported Finland and Sweden had already decided to jointly announce a decision to join Nato.

Finland’s president, Sauli Niinistö, is due to visit Stockholm on 17th May and 18 May on a state visit, where he will be hosted by King Karl XVI Gustaf.  

The meeting of the Social Democrats’ ruling committee will come shortly after the party holds three digital members’ meetings on security policy, on May 9th, May 10th and May 12th (although these may also be brought forward). 

There is still resistance in the party’s rank and file, with at least three of the party’s powerful leagues still openly opposed to joining: 

  • The Social Democratic Women in Sweden voted last week to continue its opposition to Nato membership.
  • The Swedish Social Democratic Youth League has said it would prefer Sweden to bolster its security through the EU.
  • The Religious Social Democrats of Sweden has said that it believes the decision should not be rushed through at a time of conflict.  
  • The Social Democrat Students’ League has said that it wants to wait until it has seen the security police analysis before taking a decision. 

None of these leagues can block membership, however. It is the Social Democrats’ ruling party committee which is empowered to take the decision.