Swedish finance minister unveils ‘historic’ coronavirus budget bill

Swedish finance minister unveils 'historic' coronavirus budget bill
Swedish Finance Minister Magdalena Andersson at a press conference earlier in September. Photo: Henrik Montgomery/TT
Swedish Finance Minister Magdalena Andersson presented the government's budget proposal – 105 billion kronor's worth of investment to help the economy out of the pandemic – to parliament today.

Andersson has previously described the budget as “historic in its scope”.

It contains investments of 105 billion kronor ($12 billion) for 2021 and 85 billion kronor for 2022, designed to help recover ground that was lost during the coronavirus crisis, create jobs and boost Swedish welfare.

“The proposals in the budget bill are expected to stimulate growth and employment sharply in the coming years,” wrote Social Democrat Finance Minister Andersson and her deputy, the Green Party's Finance Market Minister Per Bolund, in an opinion piece in the Dagens Nyheter newspaper on Monday morning.

Some of the announcements have already been trickling out in the run-up to Andersson's budget presentation, and one new measure announced today is keeping the new cap on unemployment insurance (a-kassa), which was raised to 510 or 1,200 kronor a day amid mass layoffs in spring, in place for another two years.

Four parties have been involved in working out the budget proposal: the ruling centre-left Social Democrat-Green coalition and the centre-right Liberal and Centre parties.

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These parties had 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, and which means the budget bill contains a range of proposals from each party.

For example, it means tax cuts on income are proposed in the budget, which the centre-liberal wing of the collaboration argues will stimulate the economy and help boost jobs in the wake of the pandemic.

And it also means investment in traditional welfare measures, such as education, elderly care and healthcare – some of the Social Democrats' favoured issues, and which include areas left bleeding by the coronavirus crisis – and billions allocated to measures for the climate, pushed through partly by the Green Party.

Sweden's GDP took a historic drop this year, falling by 8.3 percent in the second quarter compared to the first quarter (7.7 percent year-on-year when adjusted for seasonal effects) – an even bigger single-quarter drop than during Sweden's financial crisis in the 1990s and the global financial crisis in 2008.

The country's economy was in a fairly healthy state prior to the pandemic, and it is already showing signs of recovery. Financially, Sweden has weathered the pandemic better than many countries, which may also be partly to due with the fact that some of the industries hit the hardest in almost any country including Sweden – hotels and restaurants – are comparatively less crucial to the Swedish economy than to, say, Italy or Spain.

But Sweden is still going through one of its worst economic crises in decades, with high unemployment, and the state will have to borrow for some of the budget investments.

Some of the measures in the bill are temporary and will be removed in one or two years, others are permanent.

The Local will publish a full explanation of what the budget bill means for international residents shortly.


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