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Swedish budget: Will the government be able to pass its proposals?

Sweden's opposition parties have each presented their own budget motions this week, kicking off the process that will end in Sweden's budget for 2022 being voted on in November. The minority government and complex political situation mean it is very unclear what will happen then.

Magdalena Andersson and Elisabeth Svantesson in Swedish parliament
Finance Minister Magdalena Andersson and Moderate Party economic spokesperson Elisabeth Svantesson debate budget proposals in parliament. Photo: Fredrik Sandberg/TT

The Moderate Party’s economic policy spokesperson Elisabeth Svantesson said that her “goal” was for an alternative to be presented to the government’s budget proposal — which could lead to the centre-left government needing to implement a right-of-centre budget if passed.

This happened previously in 2018, when the Moderates and Christian Democrats’ budget proposal won the most votes, even though Sweden had a centre-left government at the time. That’s because the budget vote took place before the minority government had managed to form an alliance with other parties to allow it to govern. It later did this in the form of the so-called January Deal, agreeing on policy points with former opposition rivals the Centre and Liberal parties.

Now, though, Swedish politics is back in an uncertain position after the January Deal officially collapsed earlier this year and the Liberal Party said it would pursue a right-wing government in the 2022 elections.

That means it’s not certain that the government’s budget proposal will win enough votes to become reality.

In order for this to happen, the government would require support from both the Centre and Left parties, who are far removed on the political spectrum and have refused to work together. The Centre Party has more in common with the right-wing parties on economic policy, but has refused to give the Sweden Democrats influence by siding with a bloc that also includes the far-right party.

Initially, representatives from both the Christian Democrats and Sweden Democrats said they were not pursuing a right-wing budget alternative as was the case in 2018. If the opposition does not put forward an alternative budget, they also have the option of pushing for amendments to specific parts of the government budget. If that happens, one of the most likely policies to be axed is ‘family week’ — an extra six days’ paid leave for parents of school-age children, which is opposed by the Centre Party as well as the right-wing opposition.

But on Tuesday, Moderate leader Ulf Kristersson and Christian Democrat leader Ebba Busch published a joint column in Aftonbladet saying they were “starting the work of gathering support in parliament for another budget”.

They hit out at the Social Democrat-Green Party budget, which they said was “more about solving the government parties’ cooperation problems, than Sweden’s societal problems”.

Some of the ideas of the right include reduced income taxes, scrapping a recently introduced plastic bag tax, and building up nuclear power, but just as on the left, there are also areas of disagreement. For example, the Sweden Democrats’ views on pensions and sickness benefit are closer to those of the centre-left government than their right-wing allies.

Both the Centre Party and Left Party’s votes will be decisive either way; if they vote against or abstain from the vote on the government’s proposals, these are unlikely to pass. Neither has yet confirmed how they will vote. Somewhat surprisingly, one of the issues splitting the parties is forestry: “Strengthened ownership rights for forest owners” was one of the key points in the January Agreement, something which goes against the Green Party’s platform. 

So, what happens if the government’s budget is rejected?

Prime Minister Stefan Löfven has previously said that he would resign if the budget was not passed by parliament. Since then, he has announced his intention to step down anyway, and his successor Magdalena Andersson is poised to take on the role in early November. Currently Finance Minister, failing to get her government’s budget passed would be a big blow so early on in the job, but she has not yet said what she would do in this scenario.

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EU sees trouble but no breakdown with Italy far-right in power

The potential emergence of a far-right government in Italy has put the European Union on alert for disruptions, with fears that unity over the war in Ukraine could be jeopardised.

EU sees trouble but no breakdown with Italy far-right in power

Brothers of Italy leader Giorgia Meloni and the League’s Matteo Salvini are slated to be the big winners in Sunday’s general election on a firmly “Italians First” agenda, in which officials in Brussels largely play the role
of the bogeyman.

The biggest worries concern the economy.

Italy’s massive debt is seen as a threat to European stability if Rome turns its back on the sound financing championed by outgoing prime minister, Mario Draghi, a darling of the EU political establishment.

A victory by Meloni and Salvini would follow fast on an election in Sweden where the virulently anti-migration and eurosceptic Sweden Democrats entered a ruling coalition, just months before the Scandinavian country is due to take over the EU’s rotating presidency.

READ ALSO: Giorgia Meloni’s party will likely win the elections – but will it last?

But officials in Brussels said they would not jump to conclusions about Italy, cautiously hanging on to reassurances made by key right-wing players ahead of the vote.

Giorgia Meloni delivers speech at party rally

Brothers of Italy leader Giorgia Meloni (Rear C on stage) delivers a speech on September 23, 2022 in Naples. (Photo by Andreas SOLARO / AFP)

“This is not the first time that we risk confronting governments formed with far-right or far-left parties,” said European Commissioner Didier Reynders, a veteran of EU politics.

“Let voters choose their elected representatives. We will react to the actions of the new government and we have instruments at our disposal,” he added.

That was echoed by Commission head Ursula von der Leyen, who warned that Brussels had “tools” to deal with errant member states.

“My approach is that whatever democratic government is willing to work with us, we’re working together,” she said.

Anti-immigration League leader Matteo Salvini condemned the EU chief’s comments on Friday, calling them “squalid threats”.

READ ALSO: How would victory for Italy’s far right impact foreigners’ lives?

‘Benefit of the doubt’

Italy has huge amounts of EU money on the line. It is awaiting nearly 200 billion euros in EU cash and loans as part of the country’s massive share of the bloc’s coronavirus recovery stimulus package.

In order to secure each instalment, the government must deliver on a long list of commitments to reform and cut back spending made by previous administrations.

“To do without the billions from the recovery plan would be suicidal,” said Sebastien Maillard, director of the Jacques Delors institute.

“We will give them the benefit of the doubt,” said an EU official, who works closely with Italy on economic issues.

and right-wing parties Brothers of Italy (Fratelli d'Italia, FdI), the League (Lega) and Forza Italia at Piazza del Popolo in Rome, ahead of the September 25 general election.

(From L) Leader of Italian far-right Lega (League) party Matteo Salvini, Forza Italia leader Silvio Berlusconi, leader of Italian far-right party Brothers of Italy Giorgia Meloni, and Italian centre-right lawmaker Maurizio Lupi on stage on September 22, 2022 during a joint rally of Italy’s coalition of far-right and right-wing parties. (Photo by Alberto PIZZOLI / AFP)

“We will judge them on their programme, who will be the finance minister. The names being mentioned are people that we in Brussels are familiar with,” the official added.

READ ALSO: Political cheat sheet: Understanding the Brothers of Italy

However, when it comes to Russia, many fear that Hungarian Prime Minister Viktor Orban will find in Italy a quick ally in his quest to water down measures against Russian President Vladimir Putin.

A longtime friend of the Kremlin, Salvini has promised that he will not try to undo the EU sanctions. But many believe that his government will make the process more arduous in the coming months.

Whether the war or soaring inflation, “what we are facing in the coming months is going to be very difficult and very much test European unity”, said Fabian Zuleeg, chief executive at the European Policy Centre.

The likely election result in Italy is “not going to help in making some of these hard decisions”, he added.

READ ALSO: TIMELINE: What happens on election day and when do we get the results?

France’s European affairs minister, Laurence Boone, pointed to the headache of the far-right’s unpredictability.

“One day they are for the euro, one day they are not for the euro. One day they support Russia, one day they change their minds,” she told French radio.

“We have European institutions that work. We will work together. But it is true that it is worrying,” she added