Stockholm banks for stimulus, not austerity

Published on 20 September 2012 at 13:46

At a time when most European countries are adopting budgets under the banner of austerity, the budget Sweden’s government is tabling on September 20 almost amounts to a provocation. The spending plan of Prime Minister Fredrik Reinfeldt provides for an increase in spending from 2012 to 24 billion kronor (2.83 billion euros) – “of which 23.4 have already been spent”, reports Svenska Dagbladet – or between half and one percentage point of Sweden’s GDP.

This is the first time that “the Minister of Finance, the normally highly thrifty Anders Borg, has opened his wallet since 2009,” notes the newspaper under the headline ‘Budget committed.’

Among the main beneficiaries of his largesse are businesses, thanks to taxation drops from 26.2 percent to 22 percent, jobs for youth, research, infrastructure, police and justice. The change in policy dates back to August and the flurry of reforms launched then by the government. […] Since late August, it has proposed an average of 1.7 per day.

In another analysis, Svenska Dagbladet expects that Reinfeldt is hoping to spur growth and jockey into a good position for the 2014 legislative elections —

The Prime Minister described Sweden as the happy exception of Europe that will invest its way out of the crisis. One can’t help thinking of Asterix and his Gauls who refuse to submit to occupation by the Romans. And Sweden’s magic potion has obviously been our fiscal discipline.


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