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SWEDEN ELECTS

Sweden Elects: Budget reforms, a paradigm shift and 26 seconds of silence

The Local's editor Emma Löfgren explains the key events to keep an eye on in Swedish politics this week.

Sweden Elects: Budget reforms, a paradigm shift and 26 seconds of silence
Elisabeth Svantesson, Sweden’s finance minister, along with Erik Slottner, Sweden’s new Minister for Public Administration and Niklas Wykman, new Minister for Financial Markets. Photo: Finance Ministry

Hej,

I’m writing this newsletter early in the morning. It’s still dark outside but I can see a thin strip of sunny orange on the horizon and it’s almost November.

Later next month, on November 8th to be specific, Sweden’s new government is expected to hand over its first budget bill to parliament.

Rumours have it that it will not contain some of the most far-reaching reforms of the Tidö Agreement, the deal between the three right-wing parties in government and the anti-immigration Sweden Democrats.

Those reforms are instead planned in time for next year’s budget, reports Swedish finance newspaper Dagens Industri, giving the parties more time to work out the finer details of the proposals that allowed Moderate party leader – and now Prime Minister – Ulf Kristersson to form his government.

We already know a little bit about what will be proposed in this year’s budget (3,000 pages, according to Expressen). As is usually the case, the parties have been releasing information in dribs and drabs to maximise the time that the Swedish media will spend reporting on their budget.

One of the proposals is a dedicated 6.7 billion kronor (approximately $612 million) to tax cuts on fuel, following up on election promises to lower petrol and diesel prices. This would mean a decrease of one krona per litre from the start of next year, according to the parties, although Swedish news agency TT reports the actual effect at the pump will be a decrease of 0.14 kronor per litre of petrol and 0.41 kronor per litre of diesel.

Last week the government also announced its plan for a so-called “high-cost protection” for those hit by high power prices. More on that HERE.

In other news, the government has also spent the past week cautiously warning that some of the ambitious pledges made before the election may take slightly longer to implement than voters may be expecting (the above-mentioned high-cost protection was supposed to have been introduced by November 1st, which is no longer a likely deadline). 

“It could get worse before it gets better,” said Kristersson in his first speech to parliament about his promise to crack down on gang crime, a line he repeated in the first parliamentary debate last week.

Social Democrat opposition leader (and former Prime Minister) Magdalena Andersson at a press conference attacked the government on missing the November 1st deadline on the high-cost protection for energy costs. “You shouldn’t make promises you can’t keep,” she told reporters.

But she was reluctant to offer any strong criticism of the government on its migration policies, when asked in an interview by the Expressen newspaper, instead suggesting they did not go far enough.

“There is absolutely no question that we need a strict set of migration laws,” she said, rejecting the claims of Sweden Democrat leader Jimmie Åkesson that the new programme represented a “paradigm shift”.

“The paradigm shift happened in 2015, and we carried it out,” she said, taking credit on behalf of the Social Democrat-led government at the time.

Has there been a paradigm shift? More than 500 readers responded to a recent survey by The Local, with over half saying they felt less welcome in Sweden than before the election. Many shared personal stories of racism or xenophobia they had faced since moving to Sweden. Read it HERE.

The Local carried out the survey after US tech worker Kat Zhou found herself in the eye of a storm after posting on Twitter about her experiences of racism. Our Sweden in Focus podcast spoke to her after her series of tweets went viral for both the right and the wrong reasons.

In the world of local Swedish politics, an interview with the deputy mayor of Norrtälje went viral (it even made Australian news!) after he was asked by an SVT reporter about the top councillors’ decision to raise their salaries by up to 27 percent… and was speechless for 26 seconds.

SVT lets the camera roll while awaiting his response, and in the end he answers “it’s a question of priorities”. You can watch the video here.

To be fair, after this election, 26 seconds of silence felt like a relief.

In Sölvesborg, the hometown of Jimmie Åkesson, the Sweden Democrats unexpectedly lost control of the municipality after their Moderate allies switched sides. Here’s The Local’s report in English.

In Gothenburg, a red-green coalition took power after the Social Democrats, Green Party and Left Party managed to oust the Moderates, despite failing to strike a coalition deal with the Centre Party.

And in Nynäshamn, a Sweden Democrat councillor resigned after being outed as a former propagandist for neo-Nazi site Nordfront. Anti-racist magazine Expo and Expressen found that she had used the racist N-word several times in posts, described gay pride celebrations as “disgusting” and called on women to live a “National Socialist life”.

Sweden Elects is a weekly column by Editor Emma Löfgren looking at the big talking points and issues after the Swedish election. Members of The Local Sweden can sign up to receive the column as a newsletter in their email inbox each week. Just click on this “newsletters” option or visit the menu bar.

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POLITICS

Full steam ahead for Swedish economy in new three-part budget bill

Sweden has won the fight against inflation and expects GDP to grow next year, Finance Minister Elisabeth Svantesson proudly proclaimed as she presented the government's budget bill for 2025.

Full steam ahead for Swedish economy in new three-part budget bill

“Going forward, the task will be to ensure that high inflation does not return, and at the same time to implement reforms and investments that build a more prosperous, safer and more secure Sweden for generations to come,” said Svantesson in a statement on Thursday morning.

The government predicts that Swedish GDP will grow 2.5 percent next year followed by 3.2 percent 2026.

Unemployment, however, is expected to remain unchanged at 8.3 percent in 2025, only beginning to drop in 2026 (7.9 percent, according to the government’s predictions, followed by 7.6 percent in 2027).

Svantesson told a press conference that a strong focus on economic growth would create jobs.

The 2025 budget, worked out in collaboration between the right-wing government coalition and far-right Sweden Democrats, is far more expansionary than the restrained budget Svantesson presented last year when Sweden was still fighting high inflation: 60 billion kronor towards new reforms rather than 39 billion kronor for 2024. Almost half, 27 billion kronor, will go towards funding lower taxes.

ANALYSIS:

Svantesson highlighted three areas in which new reforms are prioritised:

  • Strengthening household purchasing power after several years of the high cost of living putting a strain on household budgets, with reforms set to push the tax burden to its lowest level since 1980, according to the government.
  • Reinstating the “work first” principle, meaning that people should work rather than live on benefits. Some of the measures include language training for parents born abroad and increasing the number of places in vocational adult education.
  • Increasing growth, focusing on investments in research, infrastructure and electricity supply.

In the debate in parliament on Thursday, the centre-left opposition is expected to criticise the government for lowering taxes for high earners and not investing enough in welfare. 

Investments in healthcare, social care and education are significantly reduced in this budget compared to last year: down from 16 billion kronor to 7.5 billion kronor. 

Meanwhile, the hike of the employment tax credit (jobbskatteavdraget) – a tax reduction given to people who pay tax on their job income – is expected to lead to a 3,671 kronor tax cut for people on the median salary of 462,000 kronor per year.

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