Post-summer COVID news: Swedish coalition presents budget to get post-COVID-19 economy back on track

**This article is continuously updated with the latest developments.

The Swedish coalition government of Social Democrats and the Greens announced a budget for 2021 aimed at kick-starting the economy.

The aim is Due to the COVID-19 health crisis, the Swedish economy is expected to shrink by 4.6% this year, while the unemployment rate is currently at around 9%.

The minority government’s proposal aims to create around 75,000 jobs, as well as increasing peoples’ purchasing power by rewarding low income earners with tax cuts and increasing tax credits for household expenses, in order to mitigate the ravages of the COVID-19 health crisis.

This year, Sweden’s economy is expected to shrink by 4.6%, while the unemployment rate is currently at around 9%.

Party leaders admit that strategy needs to be tightened

During their traditional summer speeches (24 August), Swedish Prime Minister Löfven and opposition leader Kristersson both agreed that the country’s strategy, which had been more relaxed compared to European peers, had to be amended. However, the two had quite contrasting tones this time around.

The prime minister admitted that the coronavirus had highlighted weaknesses in Swedish welfare, and said that the country shouldn’t aim to return to how things were before the crisis, but to “build something better” — especially when it comes to elderly care, pointing to the many staff working part-time but receiving hourly salaries.

“We need to end this now. There has to be a contract between the generations, where no-one should need to fear growing older,” he said, after the government previously announced that Sweden would have “the world’s best elderly care”. In Sweden, over-70s are still advised to limit their social contacts and avoid busy places like shops, but have been encouraged to socialise with others at a distance, for example on walks or playing boules outdoors.

Opposition leader Kristersson called for the country’s strategy to focus more on contact tracing so that the elderly do not have to remain isolated.  “I really feel for those of you who have been forced, month after month, to live isolated from children, grandchildren, and friends. It can’t just carry on like this,” Kristersson said.

Getting the economy back on track

While Löfven addressed government measures to support employers and businesses, such as a system for short-term lay-offs, increased unemployment insurance, and tax deferrals, the opposition leader focused on the notion of getting everyone back to work.

“Those who can work must work. Crisis measures must be temporary and in the long run companies must compete on their own merits, not with government subsidies. Unemployment and increased unemployment benefits are a proven way into dependency on benefits,” said Kristersson.

By comparison, the PM highlighted the importance of choosing welfare without having large tax cuts. “Now we have a historic opportunity to do the things that both keep the wheels [of society] rolling but also solve the societal problems that the corona crisis made all too clear,” he added.

[Edited by Natasha Foote, Alexandra Brzozowski, Gerardo Fortuna, Vlagyiszlav Makszimov, Daniel Eck]

→ Read more on the measures taken before summer break here:

Sweden tops EU rate of new daily COVID-19 cases

The EURACTIV Network provides you with the latest news on how the country is dealing with the coronavirus health crisis.

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