Explained: What we know and don’t know about Sweden’s 2021 budget

Negotiations to hammer out Sweden's next budget are under way between the government and its allies in parliament, and it is likely to be a much more extensive budget than in ordinary times.

Explained: What we know and don't know about Sweden's 2021 budget
Sweden's Finance Minister Magdalena Andersson. Photo: Henrik Montgomery/TT

Sweden's Finance Minister Magdalena Andersson is expected to present the government's latest assessment of the country's economic outlook and outline the general framework of the 2021 budget next week.

But we already know that one of the main purposes of the budget will be to kick-start Sweden's economy in the wake of the coronavirus crisis, by hopefully creating new jobs and fighting rising unemployment.

“There will be a clear job focus in autumn,” Andersson told the TT news agency this week, talking about the ongoing budget negotiations. “It is obviously going to be more extensive than a normal budget.”

Sweden's national economic forecaster, the National Institute of Economic Research which has said it expects the economy to recover quite a significant chunk of lost ground in the second half of 2020, predicts that the budget will include new measures worth 80 billion kronor ($9.1 billion) in 2021.

But Andersson would not be drawn on that.

“We will look at the latest prognoses and assess how large the budget should be,” she told TT.

The percentage of people registered as unemployed with Sweden's national employment agency stood at 9.2 percent in July, compared to 6.9 percent in July last year, and Andersson warned that the Swedish job market may not have hit rock bottom yet. She said that a high employment rate was crucial to ensure Sweden can afford high-quality welfare, and pledged more investment in the public sector.

Anerssson was asked by TT if the budget would include more staff in elderly care, a sector that was hit hard by the coronavirus pandemic in Sweden, with the outbreak laying bare serious flaws in many Swedish elderly care homes.

“We are not yet at the stage where I can offer that kind of answer. That said, in a situation where tax revenues are falling in municipalities and regions because of the economic crisis, we do not want a situation where there are mass layoffs in schools, healthcare and elderly care,” she said.

Elderly care homes were hit hard by the coronavirus crisis in Sweden. Photo: Pontus Lundahl/TT

Swedish healthcare is run by the country's 21 regional administrations, and schools and elderly care by its 290 municipalities. These local authorities have so far this year been allocated an extra boost of 20 billion kronor in state support due to the coronavirus crisis, of which 12.5 billion is permanent and will continue into next year.

It is not yet clear whether additional cash funding will be allocated to local authorities.

The budget is also likely to include investments in for example green technology and railways – projects that Sweden is already working on but that could potentially be sped up to create new jobs faster.

“We want to transform Sweden into a climate-smart society, so if it is possible to bring such investments forward in an economic crisis it would obviously create jobs here and now,” said Andersson.

There are four parties involved in working out the budget proposal: the ruling centre-left Social Democrat-Green coalition and the centre-right Liberal and Centre parties.

These parties have already agreed on a series of future measures set out in the so-called January Agreement in 2019, which enabled the Social Democrats and Greens to take office with the support of the latter two.

That means the 2021 budget will also include a number of tax cuts. That includes expanding a tax deduction scheme on household cleaning services (RUT), compensating households for higher environmental taxes and cutting income taxes – but the exact tax cuts are yet to be decided.

The government will put forward the final budget proposal to parliament on September 2020.

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Covid face mask rule on flights in Europe set to be eased

The mandatory EU-wide mask requirement for air travel is set to be dropped from Monday, May 16th, but airlines may still require passengers to wear masks on some or all flights

Covid face mask rule on flights in Europe set to be eased

Europe-wide facemask rules on flights are set to be ditched as early as next week in light of new recommendations from health and air safety experts.

The European Union Aviation Safety Agency (EASA) and European Centre for Disease Prevention and Control (ECDC) dropped recommendations for mandatory mask-wearing in airports and during flights in updated Covid-19 safety measures for travel issued on Wednesday, May 11th.

The new rules are expected to be rolled out from Monday, May 16th, but airlines may still continue to require the wearing of masks on some or all of flights. And the updated health safety measures still say that wearing a face mask remains one of the best ways to protect against the transmission of the virus.

The joint EASA/ECDC statement reminded travellers that masks may still be required on flights to destinations in certain countries that still require the wearing of masks on public transport and in transport hubs.

It also recommends that vulnerable passengers should continue to wear a face mask regardless of the rules, ideally an FFP2/N95/KN95 type mask which offers a higher level of protection than a standard surgical mask.

“From next week, face masks will no longer need to be mandatory in air travel in all cases, broadly aligning with the changing requirements of national authorities across Europe for public transport,” EASA executive director Patrick Ky said in the statement. 

“For passengers and air crews, this is a big step forward in the normalisation of air travel. Passengers should however behave responsibly and respect the choices of others around them. And a passenger who is coughing and sneezing should strongly consider wearing a face mask, for the reassurance of those seated nearby.”  

ECDC director Andrea Ammon added: “The development and continuous updates to the Aviation Health Safety Protocol in light of the ongoing Covid-19 pandemic have given travellers and aviation personnel better knowledge of the risks of transmission of SARS-CoV-2 and its variants. 

“While risks do remain, we have seen that non-pharmaceutical interventions and vaccines have allowed our lives to begin to return to normal. 

“While mandatory mask-wearing in all situations is no longer recommended, it is important to be mindful that together with physical distancing and good hand hygiene it is one of the best methods of reducing transmission. 

“The rules and requirements of departure and destination states should be respected and applied consistently, and travel operators should take care to inform passengers of any required measures in a timely manner.”